Reference

FX glossary

Definitions for the foreign-exchange terms used across Currency Grid. Plain language, no jargon.

Base currency
The currency in which a company keeps its books and reports financial results. Also called home currency, reporting currency, or functional currency. Amounts in any other currency must be converted to the base currency for accounting.
Bid-ask spread
The difference between the price at which a market maker buys (bid) and sells (ask) a currency. The spread is the cost of trading; mid-market rate is the midpoint.
Cross rate
The exchange rate between two currencies neither of which is the US dollar (or, in EU contexts, the euro). Computed by triangulating through the dominant base.
ECB reference rate
Daily mid-market euro exchange rate published by the European Central Bank around 16:00 CET on TARGET business days. Widely used by EU finance teams for accounting and reporting.
FX exposure
The portion of revenue, cost, or asset value that is denominated in a foreign currency and therefore subject to exchange-rate risk.
Home currency
Synonym for base currency. The currency you report in.
Interbank rate
The rate banks use to trade currency with each other. Tightest spreads in the market; not directly available to retail or business customers.
Mid-market rate
The midpoint between the bid and ask prices of a currency pair. Used as a reference rate; no bank quotes mid-market to customers.
Reference rate
An official or quasi-official daily rate published by a central bank or industry body, used as a benchmark for contracts and accounting. ECB reference rates are the most common in the EU.
Settlement rate
The exchange rate at which a transaction actually clears, including bank spread and fees. Always worse than mid-market.
Spot rate
The current market rate for immediate settlement (typically T+2) of a currency pair.
TARGET business days
Days the Trans-European Automated Real-time Gross settlement Express Transfer system is open. ECB reference rates publish only on TARGET business days.
Triangulation
Computing an exchange rate between two currencies by going through a third, typically EUR or USD, when no direct quote is available.

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Currency Grid is a spreadsheet-style multi-currency converter. Type amounts in any currency and see live conversions across rows and columns, totaled in your home currency using daily ECB reference rates.

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