Glossar

The currency spot rate is the exchange rate between two currencies for immediate settlement ‘on the spot’ (usually two business days). For most currencies, the spot rate is usually displayed to four decimal places, though for certain currencies, e.g. the Japanese yen, it is only displayed to two decimal places. The spot rate is quoted with two different values: the first rate is the buy, or bid price; the second is the sell, or ask, or offer price. If a dealer quotes spot GBP as USD 1.3019-28, it means that banks are willing to buy pounds at USD 1.3019 and sell them at 1.3028. The dealer profits from the spread of USD 0.0009 between the bid and ask rates.