The account number is the numeric identifier of a bank account.
The Foreign Exchange Market Association ("Asociace pro devizový trh"), a professional society of leading non-bank currency traders in the Czech Republic.
The agent is an individual authorized for operations with the Client Account.
Alternative authentication means the verification of a User's identity using a series of additional questions to which only the User could know the answers.
Gain in value (strengthening) of the exchange rate for one currency in relation to the others as a result of the situation on the foreign exchange market (supply and demand of the given currency).
Administrative Register of Economic Subjects – information system that centralizes information from various registers to enable searching among economic subjects registered in the Czech Republic.
The price at which a bank sells currency; that is, the price which a dealer requires when selling currencies to another bank or client.
Authentication means verifying the identity of the User via an Authentication SMS.
An authentication SMS is a numeric code that serves for verifying the identity of the User for use of the Online Broker (OLB) application. The authentication SMS is sent to the User on their mobile telephone as stated in the account administration agreement. This is a one-time code that cannot be used repeatedly and that has a limited validity period of 5 minutes. The authentication code is a unique identifier of the User as stated in the Act on Payment Systems.
Balance of trade
The commercial balance forms part of the balance of payments and consists of the balance of exports and imports and services of the country. The Czech Republic is dependent on export, which is the driver of a domestic economy and for this reason every reference to it is very carefully noted. It is closely related to the growth of GDP.
BEN is a type of bank fee arrangement for currency payments in which the recipient pays all bank charges (as well as the fees for sending the payment).
A report on economic activity in the individual regions of the USA and an indicator of future decisions by the FOMC (Federal Open Market Committee) on the development of monetary policy. It contains a summary of discussions about current economic conditions, and is issued eight times per year – always in the month when the Federal Reserve holds session.
International bank identifier code, also referred to as a SWIFT code.
The price for which a bank purchases currency, or the price which the dealer is willing to pay when buying currencies from other banks or a client.
The price at which a bank or other financial institution purchases foreign currencies; that is, the price which the quoting dealer is willing to pay when buying currency from another bank or client.
Central bank intervention
The term commonly used to describe actions of the central bank that contribute to the currency market through the buying and selling of shares for the purpose of strengthening or weakening it. The central bank typically intervenes in the currency market in order to support the local exchange rate in its country. For example, if the dollar weakens more than the central bank wishes, it may sell a large quantity of Euros for US dollars in order to strengthen the dollar.
CERTIS is the system of interbank payment systems of the Czech National Bank.
A form of payment arrangement in which a bank (or other clearing institution) settles mutual obligations and commitments (arising from its own operations and the operations of client). The clients are not mutually positioned as creditors and debtors, however their obligations are compensated within the bank.
The Czech National Bank ("Česká národní banka")is the central bank of the Czech Republic, which sets and declares internal and external currency policy, monitors the amount of money in circulation, prints new money, oversees the activities of commercial banks, manages treasury accounts, administers currency reserves, trades with securities (primarily state-owned), monitors and analyzes the volume of currency in circulation and the development trends of macroeconomic indicators, and regulates the foreign exchange market (currency operations).
The communication channel is the agreed method of information exchange between the Client and the Payment Institution with the goal of reliably capturing the agreed conditions or course of realization of payment service.
Confirmation of Currency Exchange
Written order confirmation for a currency exchange executed over the phone.
A characteristic (attribute) of currency that can be freely exchanged for another currency or for gold.
The process by which an asset or liability whose price is defined in a particular currency is replaced with an asset or liability whose price is defined in a different currency.
Consumer Price Index
Consumer Price Index (CPI) – the consumer price index expresses the weighted average of prices of a fixed basket of goods and services used by consumers. The monthly change in the consumer price index represents the level of inflation. High inflation represents negative news for all markets. A lower level of inflation results in the increase in the price of bonds, which strengthens the price of stocks, as well as the value of domestic currency.
The Contract Note confirms the progress of payments and the parameters of any foreign currency trades. The Contract Note is sent to the payer after the funds are deducted from the payment account of the Payment Institution.
The common term describing the value of one foreign currency in relation to another foreign currency, ignoring the local currency and local exchange rate. An example is the value of Euros to dollars expressed by the exchange rate 1.537.
Currency Exchange Market
The market on which currency is traded, i.e. bank notes of issuing banks. The primary reason of this form of trade is foreign tourism.
Foreign money in the form of bank notes, coins, or checks.
A contract guaranteeing the buyer (holder) of the option the right (but not the obligation) to buy or sell the set amount of the given currency for a price set in advance for a set future date. At the same time it binds the counterparty – the "writer" of the option – to purchase or sell the currencies for this previously agreed price.
An employee of a bank or other financial institution trading with currencies. This employee buys and sells currencies on their own behalf (or on behalf of an employer). This employee achieves profit when converting one currency to another, the difference in price between the buying currency and the selling currency.
A service for derivative transactions enabling clients to execute these trades up to a certain amount without needing to submit a security deposit.
Loss of value (weakening) of the exchange rate of one currency in relation to the others in connection with conditions on the foreign exchange market (supply and demand of currencies).
Derivatives is the common name for fixed futures contracts and option contracts. The market value of such a fixed or option derivative contract is derived from the market value of the foundational (underlying) asset (instrument). The asset may be a physical commodity, a security including government bonds and stock indices, or a currency.
The sale or purchase of currencies by a future agreed date at a future rate agreed in advance at the time of executing the contract. Derivative transactions include operations such as forwards, futures, and options. AKCENTA CZ offers the following derivative transactions:
An activity by which the government (mostly via the central bank) buys or sells a certain currency on the forex market for the purpose of influencing its exchange rate.
The dollar is the official currency of the United States of America and a monetary unit in more than 30 countries across the globe. It is designated by the international code USD. One dollar is divided into 100 cents.
The European Central Bank is the central bank of the Economic and Monetary Union. It was founded in the year 1998, with headquarters in Frankfurt am Main. Along with the national central banks of states participating in the European Monetary Union, it forms the European System of Central Banks (ESCB). Since 1 January 1999 ESCB has undertaken to create of the monetary policy of the EMU, to conduct foreign exchange operations associated with the Euro, to hold and manage the official currency reserves of member states, and to ensure the functioning of international payment systems.
The European Economic Area includes all member states of the European Union, Norway, Iceland, and Lichtenstein.
The Euro Interbank Offered Rate is an interest rate for which banks provide loans to each other on the European international market.
The common European currency implemented on 1 January 1999 by eleven states of the European Union. The Euro is now the official form of tender in 16 of the 27 states of the EU. The international code for this monetary unit is the abbreviation EUR. One Euro is divided into 100 cents (euro cents).
American dollars utilized in the asset and liability operations of commercial banks whose headquarters are outside the currency zone of the United States of America. The result is that Eurodollars are not subject to monitoring and regulation by the central bank of the country in which Eurodollars are used as a medium of exchange. In order for a transaction to be considered Eurocurrency, it is not the residence of the original creditor nor the residence of the end debtor that is decisive, but the location of the intermediary. Thus, for example, the American citizen loans funds to an American bank in London, which loans these funds to a company in the USA – this transaction is a Eurodollar operation. On the contrary, if the funds use an American bank as their intermediary, this would constitute a dollar operation.
The price of currency expressed in units of a difference currency, the foreign exchange rate or currency exchange rate.
Exchange rate spread
The difference between the buying rate for which currencies is purchased and the selling rate for which currencies are sold.
The Federal Reserve System in the USA, central bank of the USA.
The fee is the amount of compensation the Client is required to pay for executing a payment order. The payment institution is required to inform the Client in advance of the amount of the fee.
Foreign exchange market
The market on which national currencies are traded and whose exchanges determine currency exchange rates.
Foreign exchange (currency) markets
Stock, bond, or commodity markets for which the instruments are in foreign currencies, as well as a money markets in various currencies (i.e. purchase of funds in one currency in exchange for sale of funds in another currency).
Foreign exchange account
An account administered in a foreign currency. The interest level which applies to it differs among the individual currencies and the valuation of the funds deposited in it also differs from accounts in Czech crowns.
Foreign exchange risk
Risk of losses against profit influenced by changes in the exchange rates of foreign currencies against the rate in which accounts are kept. Foreign exchange risk can be managed by executing a derivative transaction (see forwards).
Forex is an abbreviation for Foreign Exchange. This is an international commercial system for exchange of basic and additional currency pairs; that is, a foreign exchange market whose average rates are considered the official world rates. It is also known as Forex Trading, Currency Forex, Forex Exchange Market, or simply FX.
Forward points (pips)
The percent increase or decrease in the current exchange rate due to changes in the interest rates of the countries of both currencies involved. These are taken into account for every month of the term of a derivative transaction.
The purchase or sale of currency for a fixed agreed rate where delivery and payment take place at an agreed point in time (no earlier than in two days, although usually much later). You can find out more under the term Derivative Transactions.
A term describing the agreement between AKCENTA CZ a.s. and its clients wishing to enter into a partnership in the field of foreign exchange and international payment systems, and authorizing AKCENTA CZ, a.s. to receive payment orders from client in accordance with its permit from the Czech National Bank to engage in the activities of a payment institution. The Framework Agreement covers all services offered by AKCENTA CZ a.s.
Funds consist of bank notes, coins, and non-cash money.
As with forwards, futures represent an obligation by the buyer to purchase a specific underlying asset by a certain date in the future at an established price (exercise price) and an obligation of the seller to sell the given asset under the same conditions. Unlike a forward, however, futures are traded only on exchanges (option and derivative exchanges), not on the OTC market (the off-exchange market). The conditions of the contract, including standardization of assets, are defined in detail by the exchange on which the given contract is traded.
General Business Conditions
These conditions govern the contractual relationship between the Client and AKCENTA CZ a.s. for all provided products ordered by the Client. The General Business Conditions form an inseparable part of the Framework Agreement and its provisions take priority over the provisions of the General Business Conditions.
GDP is the overall monetary value of farms and services created for a given period in a given territory. This indicator is used to define the productivity of the economy. The time period is typically one year, but GDP is also published on a quarterly basis.
Direct insurance against risk based on the pairing of different cash flows – the objective is to achieve a state where the cash flows on the asset side are covered by the cash flows on the liability side.
An electronic system for managing bank accounts or conducting bank transactions using remote access from a user's computer.
The internationally standardized form of bank account number for simplified payment among member EU states. It was created through the cooperation of the European Committee for Banking Standards (ECBS). It enables clear-cut identification of the account, country, and banking institution of the payment recipient in the event of cross-border transfers.
According to Act No. 253/2008 Coll., on selected measures against legitimization of proceeds of crime and financing of terrorism, every financial institution is required to confirm the identity of the participants (individuals and companies) when settling currency trades.
Index of Industrial Production
Index of Industrial Production (PPP ) – a preliminary estimate is made public approx. two weeks after the end of the month. This index includes production, mining, and public services. It forms approx. ¼ of GDP. The value of this indicator grows with economic growth and drops with a decrease in the economy. Growth in this indicator creates a positive impulse for an increase in the strength of the currency in the given country.
A document in which the vendor lodges a monetary claim against a client for goods delivered or work and services provided (however, this can also apply to any other general lodging of monetary claims).
Expresses the average year-on-year growth of the price level of a basket of consumer goods. It is stated in per cent. Often used as an automatic adaptation of prices in contracts. In the Czech Republic inflation is precisely defined as a sliding average of 12 year-on-year values for growth of the consumer price index.
In the wider sense, use of the internet in banking; in the narrower sense, the actual execution of bank products and services via the internet.
Internal Payment Account (IPA)
Your Internal Payment Account (IPA) is a tool for conducting outgoing and incoming international payments and currency conversions. It is advantageous mostly for those clients who receive payments in foreign currencies from their business partners and at the same time pay obligation to their partners in these currencies.
It can also be used effectively by clients who collect payments from international partners or make payments to them for products or services.
An activity by which the government influences the exchange rate using interest rate, tax, customs, or subsidy policy.
The level of growth of the aggregate price level between two periods (see inflation).
An international payment is a non-cash transfer of funds in Czech or foreign currency to or from a foreign country or in a foreign currency between domestic and foreign subjects in the Czech Republic unless the account of the recipient is administered by the provider of payment (i.e. if the payment account of the payer and payee are not administered by the same payment institution).
The variability of the exchange rate during the day.
Leading Indicators – statistical data which helps with forecasts of future economic development. It is a summary of leading economic indicators including new orders, weekly jobless claims for unemployment insurance, money supply, average work week, building permits, and stock prices.
London Interbank Bid Rate – reports on interbank activity and Eurocurrency activity are typically related to LIBOR and LIBID.
London Interbank Offered Rate – the interest rate at which banks offer each other loans on the London interbank market.
A monetary institution is a bank or other financial institution, or the branch of a foreign bank or other foreign financial institution, that is authorized to receive deposits from the public.
The Markets in Financial Instruments Directive. Its goal is specifically to increase protection of clients who are provided investment services and to increase transparency of capital markets.
Payments executed without involving cash; transferring funds between the bank accounts of participating subjects.
Non-cash forex trade
A non-cash trade with a foreign currency is the purchase or sale of funds in Czech or foreign currency for funds in another currency that takes place via the non-cash transfer of funds from one payment account to another payment account.
Normal payment speed
Normal payment speed is characterized by a settlement period of 2-3 business days.
The transmitting of information about an expected incoming payment from AKCENTA CZ a.s.. This serves for easier matching of an incoming payment to the given client.
The price at which a bank sells currency, i.e. the price which the dealer demands when selling currencies to another bank or client.
OLB or On-line Broker is an electronic system for executing currency exchanges online via the internet.
Online commerce is the instant non-cash transfer of funds.
Unlike forwards, futures, and swaps, options give the bearer the right, but not the obligation, to buy or sell a certain asset as of a certain date or after a certain period in the future for an established price (exercise price, strike price). An option binds the seller with an obligation to buy or sell a given asset under these same conditions. The conditions of the trade are described in detail in the contract. Options are traded both on the over-the-counter (off-exchange) market and in exchanges. Depending on the type of underlying asset, options are divided into spot assets (owner of the option has a direct right to buy or sell the given asset) and options on futures (the owner of the option has the right to buy or sell the given asset via futures).
A binding order on the basis of which the Company automatically trades the requested currency on behalf of the client if the currency attains the desired level on the market within an agreed period of time.
Open currency position
The difference between the assets and the liabilities in a given currency. The open currency position is linked to foreign exchange risk.
OUR is a type of bank fee for forex payments where the payer bears all costs for the transfer of funds.
Pip (Forward points)
The percent increase or decrease of the current exchange rate on the basis of changes in the interest rates of both participating countries. They are added for each month for the duration of the derivative transaction.
The payer is a user from whose payment account the funds are to be deducted in order to complete payment transactions, or who makes funds available for completing payment transactions.
The payer information for receipt of payment orders is confirmation of the conditions of a non-cash foreign exchange trade agreed between the Payment Institution and the Client, which the Payment Institution offers the Client immediately after receipt of the payment order. The document contains exact and binding instructions for the Client for transfer of funds for compensation of a payment transaction in the currency used in the payment order, data about the charge the payer is required to pay to the provider for carrying out the payment transaction, as well as an itemized statement if the charge is composed of multiple separate items, as well as the exchange rate used and the amount of the payment transaction after exchanging currency and the date of receipt of the payment order.
A payment institution is a legal entity that is authorized to provide payment services on the basis of a permit to conduct the activities of a payment institution granted by the Czech National Bank.
A payment order is an instruction to the provider through which a payer or recipient requests the execution of a payment transaction.
The payment title is a numerical identifier of the purpose of the international payment. A current list of all payment titles is listed in table BA0030 of the Czech National Bank at http://www.cnb.cz.
A payment transaction is the depositing of funds into a payment account, the withdrawal of funds from a payment account, or conversion of funds.
A payment account is an account which serves for carrying out payment transactions.
Prague Interbank Bid Rate – one of the key indicators of the credit markets of important financial centres is the reference rate at which banks are willing to buy (borrow) deposits. For the Prague financial centre this rate is called PRIBID. It is based on the quotations of referring banks on the interbank deposits market as well as the settings algorithm for the settings of PRIBID and PRIBOR.
Prague Interbank Offered Rate – one of the key indicators of the credit markets of important financial centres is the reference rate at which banks are willing to sell (lend) deposits. For the Prague financial centre this rate is called PRIBID. It is based on the quotations of referring banks on the interbank deposits market as well as the algorithm for the settings PRIBID and PRIBOR.
Producer Price Index
Producer Price Index (PPI) – these indices are announced in the second week of the month and reflect the value of the previous month. High PPI growth is bad news for the value of the domestic currency on the forex market. The following indices are monitored: finished goods – considered an indicator of inflation of manufacturing prices, it is also the most widely followed of the PPIs, as it signals the onset of inflation for prices of consumer products, intermediate materials, supplies, and components – this index tends to be more transitory than PPI of finished goods, since it is more advantageous to follow a long-term development trend than individual month-on-month changes. Changes in this index typically indicate changes in the finished goods PPI, crude materials for further processing – tends to be unstable in month-on-month comparison, but the long-term trend indicates the value of the intermediate materials PPI and the finished products PPI.
Buying or selling a currency at exchange rates current at a given moment, where the delivery and payment takes place within no later than two business days.
The Client issues an order to the bank to carry out a payment from their account to the bank account of the recipient.
The specific exchange rate on offer.
The complex quality assessment of a financial institution conducted by an independent agency. An indicator of the quality and reliability of the institution.
The recipient is the user to whose payment account the funds are to be registered as specified in the payment order, or to whom the funds should be made available as specified in the payment order.
A securities broker is a legal entity that brokers access to capital markets, i.e. buys and sells securities, for its customers.
They carry out trades with securities on behalf of their customers, which differs from a dealer, who carries out trades on their own behalf. In the Czech Republic they are authorized to do this by a special permit from the ČNB. A securities broker provides investment services according to the Act on Securities.
The price for which a bank or other financial institution sells currency, that is, the price which the dealer demands when selling currency to another bank or client.
SEPA payments are simplified payments between European Union member states or other states participating in the Agreement on the European Economic Area. To take advantage of simplified SEPA payments, a payer is required to enter the payment account number of the recipient in the format IBAN, SWIFT code of the recipient bank and may use these payments solely for transferring funds in EUR.
SEPA/Europay is a service provided by AKCENTA CZ.
SEPA/Europay is any payment that meets the following criteria:
SHA is a type of bank fee arrangement for foreign exchange payments where the payer pays fees for sending payment and the recipient pays the fees for receiving the payment to their account, the most common variant.
A trade or sequence of trades based on the expectation of uncertain profits.
The purchase or dale of currencies at the up-to-date exchange rate at a given moment, whereas delivery and payment take place as a rule within five business days.
The spot date is the moment from which the payment transaction is recorded for the purposes of settling interest from funds in the payment account.
A derivative transaction with foreign currency. A fixed negotiated trade with foreign currency that is composed of two parts, during which the immediate purchase or sale of funds in one currency for a specific quantity of funds in another currency, and subsequently by a specific contractual future business day the purchase or sale of the funds in one currency for a specific amount of funds in another currency at a swap exchange rate agreed at the time of executing the given trade;
SWIFT ( BIC)
SWIFT code - Society for Worldwide Interbank Financial Telecommunication (also BIC code) serves for identifying banks in interbank electronic communications and payment systems. This global system was founded in the year 1977. It consists of an eight- to 11-character alphanumeric code.
T+5 settlement date
A composite settlement date composed of the following:
Trade balance report
This indicator reflects the volume of export and import for a given month and the resulting positive or negative balance of international trade. Foreign trade is published every month covering the previous two-month period. It does not typically provide a significant impulse for further weakening or strengthening of the Czech crown, but in the medium term its amount may have an influence on exchange rate trends.
The quarterly published results from the previous quarter (May – for the 1st quarter, August – for the 2nd quarter, November – for the 3rd quarter, February – for the 4th quarter of the previous year). The data is published by the 10th day of the given month. As a rule, it does not have an impact on exchange rate trends.
A unique identifier is a combination of letters, numbers, or symbols which identifies the user or their account when carrying out payment transactions according to criteria defined by the provider.
University of Michigan Consumer Sentiment Index
Consumer Sentiment – the growth of this index is caused primarily by strong economic growth, wage growth, the price of stocks and improvements in standard of living. In recent times the market has reacted relatively powerfully to the publication of this indicator of consumer mood. A negative mood signals a weaker economy and lower interest rates, and this combination leads to a decrease in the value of the dollar on the forex market. Optimism of consumers denotes potential growth of interest rates and an increased demand for the dollar. This index is published every month.
An urgent payment is an expedited international payment sent from the payer's bank with a settlement date (payment date) of T+0 (on the date of submitting the Instruction for Outgoing Forex Payment Transaction). The registration of the payment by the recipient account depends on the clearing date of the bank in question. The Instruction for Outgoing Forex Payment Transaction must be submitted for payments in EUR and USD by 1:30 p.m.; for other currencies by 9:30 a.m. A condition of payment is the prior receipt of funds to the AKCENTA CZ bank account.
Volatility refers to variability or fluctuations, e.g. of prices, exchange rates, or interest rates.