Forex Trading Glossary, Letter "E"

A B C D E F G H I K L M N O P Q R S T U V W

Easing - A modest decline in price.

Economic indicator - An"economic indicator" is statistic that indicates current economic growth rates and trends, such as retail sales and employment.

ECU - The European Currency Unit.

EDI - Electronic Data Interchange.

Effective exchange rate - An attempt to summarize the effects on a country's trade balance of its currency's changes against other currencies.

EFT - Electronic Fund Transfer.

EMS - The "European Monetary System."

European Monetary System - A system that was designed to stabilize, if not eliminate, exchange risk between member states of the EMS as part of the economic convergence policy of the EU. It permits currencies to move in a measured fashion (divergence indicator) within agreed bands (the parity grid) with respect to the ECU and consequently with each other.

Exchange control - An "exchange control" is a system of controlling inflows and outflows of foreign exchange. Devices include licensing multiple currencies, quotas, auctions, limits, levies and surcharges.

Exotic - A less broadly traded currency.

Exposure - (A) Net working capital - The current assets in a foreign currency minus current liabilities in the currency.

(B) Net financial method - The current assets in a foreign currency minus current liabilities and long-term debt in the currency.

(C) Monetary/non-monetary method - Monetary assets and liabilities in the foreign currency are valued at present exchange rates, while non-monetary items are entered at the relevant historic rates.

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