Navigate the complex world of currency management with our comprehensive dictionary of financial terms and definitions.
Unrealised FX gains or losses reflect the change in the value of foreign currency denominated sales/purchase transactions that are recorded in financial statements prior to the settlement of the invoices. For example, a U.S.-based company sells EUR 100,000 worth of motor vehicle parts to a European distributor. When the invoice was recognised, the spot EUR-USD […]
In a currency transaction, the value date (VD) is the date at which the trade is settled and one currency is exchanged against another. In a spot market transaction the most common value date is two days after the transaction was agreed If the value date is more than 48 hours away from the day […]
A vanilla currency option is a financial derivative instrument that gives the buyer the right —but not the obligation— to buy (in a ‘call’ option), or to sell (in a ‘put’ option) the contracted currency at a set price or exchange rate (known as the ‘strike price’), on a predetermined expiration date. The seller of […]
The weighted average exchange rate, for an accumulated FX exposure is an average of the exchange rates used in the valuation of each portion of the exposure, weighted by its size. For example, a company with USD as its functional currency has an exposure of EUR 100 valued at the exchange rate of EUR-USD 1.30, […]
Wire transfers, also called bank transfers or credit transfers are the transfers of funds sent by one person or entity to another using computer-based technology and without human intervention. Wire transfers provide a fast and reliable way to send money around the world, either using traditional banks or other Fintech alternatives like TransferWise for individuals […]
WM Reuters benchmark rates are spot and forward currency rates in the main currency pairs announced each day at 4pm London time. Made by taking an average of the exchange rate in currency trades 30 seconds before and after 4pm in the London market, these benchmark rates can be used by companies to reduce search […]
