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Forex Dictionary

 
 
 
 
 
 
 

ESM (European Stability Mechanism)

The European Stability Mechanism is an organization of the European Union which was founded with the main purpose to provide financial help to indebted Eurozone countries or to troubled banks.

Based in Luxembourg City, it is known as the permanent successor to the temporary European Financial Stability Facility (EFSF).

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Exchange-Traded Funds

During trading hours, users can both buy and sell shares and manage them passively as funds. The fund manager will try to copy an index development as close as possible. The manager will purchase the same securities that make up the index and transfer them into the fund’s portfolio.

Euro Interbank Bid Rate

Also referred to as EURIBID. It is an informal term that refers to the EURIBOR counterpart. The EURIBID is the average interest rate where it shows the demand from banks on euro loans for other banks on the interbank money market.

Euro Interbank Offered Rate

Introduced in 1999, EURIBOR was the new European reference interest rate. What it does is to replace all domestic reference interest rates of European participating states. It works with the exception of London Euro-Libor. EURIBOR is based on individual interest rates from a selection of European banks, it calculates daily at 11.00 Telerate in Brussels.

EURIBOR doesn’t take the lowest and highest interest rates into account to achieve a credible reference interest rate.

EuroCOIN

Monthly DP development indicator regarding the euro area. The Center for Economic Policy Research, or CEPR, compiles this indicator each month, which predicts euro area GDP growth on a monthly basis. The EuroCOIN is adjusted for measurement inaccuracies and seasonal and short-term fluctuations regarding where would the GDP be exposed.

The EuroCOIN indicator also provides data on approximate GDP developments regarding the euro area.

Eurodolar

It is the Euro/USD currency pair. It’s an operation where someone lends, for example, funds to a US bank in London, which would lend those funds to a US company.

Eurolibor

Refers to the European instrument on international markets’ rate.

Euroobligace

Denomination for long-term bonds in an asset other than that of the country or countries where most or all of these securities are sold.

Eurobond

It is an outsider bond from the borrower’s country. Usually from outside the country in whose currency its nominal value is quoted.

Eurex

It’s the cooperation between standard products and the European futures market with harmonizing order.

Eurogroup

Name given to the euro area’s finance ministers.

Eurosystem

Cooperation between the European Central Bank and the national central banks of the euro area Member States.

Eurozone

The territory of the Member States that adopted the euro as their common currency.

Event-driven

Relation between market events and the life cycle of joint-stock companies.

European Central Bank

Also known as ECB, it is an independent body in charge of the monetary policy of the euro area. It is in charge of setting up interest rates, foreign exchange reserve management, and it’s the only entity with the exclusive right to print the euro.

European Investment Bank

EU Member States’ International organization founded in 1958, in charge of supporting EU policy decisions while developing appropriate investment approaches to the market.

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