Glossary
B
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Settlement and related processes.
Balance of Payments
A systematic record of the economic transactions during a given period for a country.
(1) The term is often used to mean either:
(i) balance of payments on "current account"; or
(ii) the current account plus certain long term capital movements.
(2) The combination of the trade balance, current balance, capital account and invisible balance, which together make up the balance of payments total. Prolonged balance of payment deficits tend to lead to restrictions in capital transfers, and or decline in currency values.
Balance of Trade
The value of country’s exports minus imports
Bank Rate
The rate at which a central bank is prepared to lend money to its domestic banking system.
Bar Chart
A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar, the opening price, which is marked with a little horizontal line to the left of the bar, and the closing price, which is marked with a little horizontal line of the right of the bar.
Base Currency
In terms of foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. The base currency is the currency against which exchange rates are generally quoted in a given country. Examples: USD/CHF, the US Dollar is the base currency; EUR/USD, the EURO is the base currency.
Basis point
One per cent of one per cent.
Basket
A group of currencies normally used to manage the exchange rate of a currency. Sometimes referred to as a unit of account.
Bear Market
A market distinguished by declining prices.
Bid
The price at which a buyer has offered to purchase the currency or instrument.
Big Figure
The first two or three digits of a foreign exchange price or rate.
Bonds
Bonds are tradable instruments (debt securities) which are issued by a borrower
Bretton Woods Agreement of 1944
An agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold at US $35 per ounce. The agreement lasted until 1971, when President Nixon overturned the Bretton Woods agreement and established a floating exchange rate for the major currencies.
Broker
An agent, who executes orders to buy and sell currencies and related instruments either for a commission or on a spread. Brokers are agents working on commission and not principals or agents acting on their own account. In the foreign exchange market brokers tend to act as intermediaries between banks bringing buyers and sellers together for a commission paid by the initiator or by both parties. There are four or five major global brokers operating through subsidiaries affiliates and partners in many countries.
Bull market
A prolonged period of rising prices.
Bundesbank
Reserve Bank of Germany. | 
