Understanding currency jargon
- Credit: Archant
Before you start researching your currency exchange make sure you understand the jargon professionals use both in English and French
Written by Stuart Moffat, marketing manager at Currencies Direct
Interbank rates – les taux (mpl) interbancaires
Interbank rates are the wholesale rate at which banks (and only banks) buy and sell currency between themselves. It’s a useful indication of how a currency pair is performing however, people and businesses (whoever they use) will have their money exchanged at a ‘commercial’ rate.
Exchange rate – le taux de change
The exchange rate is the value at which a currency will be exchanged against another. It is generally expressed with four decimals.
Currency pair – une paire de devises (f)
When talking about exchange rates, currencies are always quoted in pairs, such as GBP/EUR and EUR/USD. The first currency is called the ‘base currency’ and the second one is a ‘quote currency’.
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Currency converter – un convertisseur de devises
A common tool found on a number of company websites. They ask you to input the amount of currency you want to buy or sell and then they return an exchange rate and an amount. However, don’t always assume this is the rate you will get for your exchange.
Commission – une commission/les frais
The fee that a broker or bank may charge their clients for dealing on their behalf.
International money transfer – un transfert d’argent à l’étranger
The act of moving money from one country to another, from one destination account to a nominated overseas account.
Payee/beneficiary – bénéficiaire
The party receiving a money transfer, also known as recipient or beneficiary account.
Spot contract – un contrat immédiat
A spot contract allows you to agree an exchange rate based on the current market rate, for an immediate transfer.
Forward contract – un contrat à terme
A forward contract enables you to lock in the current exchange rate for a transfer at a later date. This is usually a maximum of two years and you usually pay a deposit of around 10% up front and then the rest when the contract matures.
Limit order – ordre de marché cible
A limit order is generally used when you want to send foreign currency at a guaranteed rate. You your target exchange rate and when the market reaches that rate, your transfer will be triggered.
Rate alert – la surveillance des cours
Currency specialists often provide a rate alert service which will help you transfer based upon specific market movements. You choose the currency and the rate you’re interested in and they’ll inform you when the markets have reached that rate, allowing you to decide whether to transfer.
FCA – (Financial Conduct Authority) – Autorité de Conduite Financière
The FCA is a financial regulatory body in the UK. It regulates the conduct of more than 56,000 businesses, ensuring consumer protection as well as the integrity of the UK financial system.
ACPR – (French Prudential Supervision and Resolution Authority) – Autorité de Contrôle Prudentiel et de Résolution
The ACPR is an independent administrative authority which monitors the activities of banks and insurance companies in France.