Forex Glossary

Traders, especially beginners, may not know or understand some Forex terms, so we provide our users with a list of specialized terms with their definitions.

En TermEn Description

stands for Harmonized Consumer Price Index. HICP is an indicator of inflation, a single cornerstone in the statistical system for the EU countries. The index is particularly important in the periods of interest rate increases, as its growth provokes further monetary tightening and consequently the national currency upswing.

Economy Watchers Survey

assesses current economic conditions in a country.

CPI (Consumer Price Index)

indicates changes in retail prices for goods and services the market basket comprises. The index is based on cost of food, clothes, education, housing and household utilities, leisure and entertainment, charges for health care services and transportation fares. The index is calculated monthly. It is a key measure of inflation in any country.

Consumer Confidence

indicates how consumers feel about current economic conditions in their country. The index is calculated on the basis of a monthly survey. The survey respondents are asked to assess economic prospects of their country. The index does not tend to affect the markets much, because it provides a subjective vision of the economy, rather than a real picture. A rising index augurs well for the national currency.

PMI (Purchasing Managers’ Index)

is a leading indicator. Its reading is determined by polling manufacturing supply managers. The index provides insight into business trends and influence of the economy on price formation.

Leading index

shows an average of leading economic indicators such as Factory Orders, Initial Jobless Claims, Money Supply, Average Workweek, Building Permits, quotes of common stocks, Durable Goods Orders and Consumer Confidence. The leading index is believed to predict the pace of economic growth over the next six months. The index is calculated at the beginning of every month and released at 10:00 EST (NY).

ECB (European Central Bank)

was established on June 1, 1998. The ECB headquarters are situated in Frankfurt am Main, Germany. The General Council of the European Central Bank includes representatives of all the EU countries. The ECB is independent from other EU authorities.

Central Bank of the Russian Federation

is the primary bank of Russia, its main issuing monetary body. Together with the government, it develops and implements the monetary policy. The bank has broad powers. In particular, it is accredited to issue the national currency and regulate commercial banks. The central bank of the Russian Federation coordinates and regulates Russia’s entire credit system. It acts as economic regulator. The bank supervises lending institutions, grants and withdraws banking licenses. The headquarters of the bank are in Moscow.

Mario Draghi

is an Italian economist. He has been the ECB President since 2011. He also headed the Bank of Italy from 2005 to 2011.

Jefferies & Co

is an American global investment banking firm. Jefferies & Co is the largest independent bank in the USA.

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