1. FOREX GLOSSARY
SUPPORT: A price that acts as a
floor for past or future price movements.
SUPPORT LEVEL: A technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself.
SWAP: A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.
T/P: Stands for “take profit” Refers to limit orders that look to sell above the level that was bought, or buy back below the level that was sold.
TECHNICAL ANALYSIS: The process by which charts of past price patterns are studied for clues as to the direction of future price movements.
2. ECONOMY GLOSSARY
TAPERING is a gradual winding down of central bank activities used to improve the conditions for economic growth, which is primarily aimed at interest rates and investor expectations of what those rates will be in the coming time (including conventional central bank activities, such as adjusting the discount rate or reserve requirements, or more unconventional ones, such as quantitative easing (QE).
FEDERAL RESERVE BANK is the central bank of the United States, which was founded by the U.S. Congress in 1913 in order to provide the nation with a safe, flexible and stable monetary and financial system. The Federal Reserve Bank is independent because its decisions do not have to be ratified by the President or any other organization but it is still subject to Congressional oversight and must work within the framework of the government’s economic and financial policy objectives. Federal Reserve Bank is often known as “THE FED".
MONETARY POLICY is the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in the vault (bank reserves). Monetary policy is one of the ways that the U.S. government attempts to control the economy. If the money supply grows too fast, the rate of inflation will increase; if the growth of the money supply is slowed too much, then economic growth may also slow. In general, the U.S. sets inflation targets that are meant to maintain a steady inflation of 2% to 3%.
FISCAL CLIFF is a combination of expiring tax cuts and across-the-board government spending cuts scheduled to become effective Dec. 31, 2012. The idea behind the fiscal cliff was that if the federal government allowed these two events to proceed as planned, they would have a detrimental effect on an already shaky economy, perhaps sending it back into an official recession as it cut household incomes, increased unemployment rates and undermined consumer and investor confidence. At the same time, it was predicted that going over the fiscal cliff would significantly reduce the federal budget deficit.
ECONOMIC STIMULUS is attempts by governments or government agencies to financially stimulate an economy. An economic stimulus is the use of monetary or fiscal policy changes to kick start a lagging or struggling economy. Governments can use tactics such as lowering interest rates, increasing government spending and quantitative easing, to name a few, to accomplish this.
SUPPORT LEVEL: A technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself.
SWAP: A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.
T/P: Stands for “take profit” Refers to limit orders that look to sell above the level that was bought, or buy back below the level that was sold.
TECHNICAL ANALYSIS: The process by which charts of past price patterns are studied for clues as to the direction of future price movements.
2. ECONOMY GLOSSARY
TAPERING is a gradual winding down of central bank activities used to improve the conditions for economic growth, which is primarily aimed at interest rates and investor expectations of what those rates will be in the coming time (including conventional central bank activities, such as adjusting the discount rate or reserve requirements, or more unconventional ones, such as quantitative easing (QE).
FEDERAL RESERVE BANK is the central bank of the United States, which was founded by the U.S. Congress in 1913 in order to provide the nation with a safe, flexible and stable monetary and financial system. The Federal Reserve Bank is independent because its decisions do not have to be ratified by the President or any other organization but it is still subject to Congressional oversight and must work within the framework of the government’s economic and financial policy objectives. Federal Reserve Bank is often known as “THE FED".
MONETARY POLICY is the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in the vault (bank reserves). Monetary policy is one of the ways that the U.S. government attempts to control the economy. If the money supply grows too fast, the rate of inflation will increase; if the growth of the money supply is slowed too much, then economic growth may also slow. In general, the U.S. sets inflation targets that are meant to maintain a steady inflation of 2% to 3%.
FISCAL CLIFF is a combination of expiring tax cuts and across-the-board government spending cuts scheduled to become effective Dec. 31, 2012. The idea behind the fiscal cliff was that if the federal government allowed these two events to proceed as planned, they would have a detrimental effect on an already shaky economy, perhaps sending it back into an official recession as it cut household incomes, increased unemployment rates and undermined consumer and investor confidence. At the same time, it was predicted that going over the fiscal cliff would significantly reduce the federal budget deficit.
ECONOMIC STIMULUS is attempts by governments or government agencies to financially stimulate an economy. An economic stimulus is the use of monetary or fiscal policy changes to kick start a lagging or struggling economy. Governments can use tactics such as lowering interest rates, increasing government spending and quantitative easing, to name a few, to accomplish this.
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