Balance of Trade – The difference between the value of a country’s exports and imports. A positive balance of trade occurs when exports are higher than imports, and vice-versa is a trade deficit.

Bar Chart – A financial chart that uses bars to represent the high and low prices of a currency. The four values on the chart are currency, opening price, high and low.

Base – The first currency in a currency pair on the forex is referred to as the base currency. The pair shows how much the base currency is worth in reference to the second currency. A trader’s home currency is usually listed as the base, but not always. For example: in the pair AUD/USD 1.0812, AUD is the base currency with 1 AUD valued at 1.0812 USD.

Bear Market – A market of declining value is often referred to as a bear market.

Bid – The bid is the price at which a currency or financial instrument can be sold on the market. The market buys at the bid price. In a currency pair quote, the bid price is usually accompanied by the quantity to be sold.

Bid/Ask Spread – The bid/ask spread is the difference between the ask price and the bid price.

Big Figure – The big figure refers to the first two or three digits of a currency price or exchange rate. This can be a whole number or it can include a fractional amount. For example, if the AUD/USD ask price is 1.0812, the big figure is 1.08. Dealer quotes often leave out the big figure as a given, so the AUD/USD price of 1.0812/60 would be listed as 12/60.

Book – A trader’s book is an overview or summary of his or her total positions on an account.

Bretton Woods – The Bretton Woods Agreement is a 1944 financial treaty put into place at the end of World War II for the purpose of maintaining the price stability of the world’s currencies. Under the agreement, the U.S. dollar was pegged to gold at $35 per ounce, and most other currencies maintained a peg to the U.S. dollar. When the United States went off the gold standard in 1971, the Bretton Woods System collapsed, and the foreign exchange market began to develop.

British Retail Consortium (BRC) – The BRC is a shop price index used to measure the rate of inflation by surveying price changes of various goods at various retailer shops.

Broker – A broker is an intermediary agent or “middleman” that brings together a buyer and a seller in order to complete a full transaction for the both of them. Brokers make money by charging a fee or commission for the trade. A broker is not the same as a dealer. A dealer takes one position of the trade.

Bull Market – When a market rises in value it is referred to as a bull market.

Bundesbank – Bundesbank is the name of the Central Bank of Germany.