Currency exchange glossary

You may think that the foreign currency markets are confusing, but you only need to know the stuff that's relevant to your transaction. If you have any other queries, just call or email us and we'll do our best to help.

Currency exchange rate – the value of one currency against another. For example, the UK Pound to US Dollar exchange rate may be: "one pound is worth one dollar and sixty cents" or £1=$1.6.

Foreign currency market – the market on which currencies are monitored, bought and sold. A broker works within the foreign currency exchange market all the time, which is why you can often get better rates with a broker than through a bank.

Money Service Business – a money service business is regulated by Her Majesty's Revenue and Customs. Don't use a broker that doesn't have a MSB licence number.

Commission – a commission is the fee that some banks and brokers take for handling your currency exchange. At Foreign Currency Exchange, we don't charge any commission to our clients.

Contract – a contract is the transaction you enter into in order to move your money from one currency to another. There are different types of contract available, depending on how much you are transferring or how regular your payments will be.

Forward contract – this allows you to secure a favourable currency exchange rate for up t 2 years in advance. You don't need to worry about currency movements during that period and you can plan your payments ahead of time.

Stop loss – this contract allows you to set a lower limit for the rate you want to achieve. Your currency will automatically be bought at or above that price if the rate starts to fall.

Limit order – the opposite to a stop loss, the Limit order allows you to set the rate you want to achieve and your currency will automatically be bought at that rate if the market is buoyant.

Foreign Currency Exchange Ltd is a commercial currency brokerage based in the UK. We help thousands of clients move hundreds of million pounds across the globe every day. From large businesses to private individuals who wish to send regular payments abroad, you can save money by getting a better currency exchange rate than your bank. The Foreign Currency Exchange buys currency at wholesale rates and can help you save money with our fast secure service. For more information contact us now, telephone +44 (0) 20 7989 0000 or email info@fcexchange.co.uk