T

Tan Book An economic report prepared by the Federal Reserve for

FOMC meetings.

Tankan Economic Survey The Japanese equivalent of the American

Tan Book, which is released by the Federal Reserve. The survey is

released on a quarterly basis.

Technical analysis The chart study of past behavior of commodity

prices for purposes of forecasting their future performance.

Theory of elasticities A model of exchange rate determination stating

that the exchange rate is simply the price of foreign exchange that

maintains the BOP in equilibrium. The degree to which the exchange

rate responds to a change in the trade balance depends entirely on

the elasticity of demand to a change in price.

Theta (T) or time decay Occurs as the very slow or nonexistent

movement of the currency triggers losses in the option's theoretical

value.

Three Buddha top formation A reversal candlestick combination. It

consists of a head-and-shoulders formation, or three consecutive

rallies in which the first and the third are of approximately the same

height, and the second is the highest.

Threshold of divergence A safety feature for the EMS that creates

an emergency exit for currencies that become the singular focus of

various adverse forces. The threshold of divergence indicates when

the specific country with the pressured currency should take

additional steps other than simple central bank intervention in the

foreign exchange markets.

Time decay See Theta.

Time value (time premium or extrinsic value) The difference between

the option premium and its intrinsic value.

Tohbu (gravestone doji) A reversal candlestick formation.

Tomorrow/next (T/N) deal A foreign exchange deal that matures the next

business day, or one day prior to the spot date.

Tonbo (dragonfly) A reversal candlestick formation.

Traditional (Charles Dow) percentage retracements Occur at 33

percent, 50 percent, and 66 percent.

Transaction exposure Potential profit and loss generated by current

foreign exchange transactions.

Translation exposure The risk of change of the consolidated corporate

earnings as a result of past volatility in the base currency.

Trend The general direction of the market, as shown by the

significant peaks and troughs of the currency fluctuations.

Trendline A straight line connecting the significant highs (peaks) in a

downtrend, and the significant lows (troughs) in an uptrend.

Triangle A continuation formation that resembles the outline of a

pennant, but without the pole. It consists of a brief consolidation

period within a solid and steep upward trend or downward trend. The

consolidation itself tends to be sloped in the opposite direction from

the slope of the original trend, or simply flat. The consolidation is

bordered by converging support and resistance lines, making it look

like a triangle. When the currency resumes its original trend by

breaking out of the consolidation, the price objective is the height of

the triangle, measured from the breakout price level.

Triple bottom A bullish reversal pattern that consists of three bottoms of

approximately equal heights. A parallel—resistance—line is drawn

against a support line, which connects these tops. The break of the

resistance line generates a move equal in size to the price difference

between the average height of the bottoms and the resistance line.

Triple top A bearish reversal pattern that consists of three tops of

approximately equal heights. A parallel—support—line is drawn

against a resistance line, which connects these tops. The break of

the support line generates a moveequal in size to the price difference

between the average height of the topsand the support line. |

TRIX Index An oscillator that consists of a one-day ROC calculation of a

triple exponentially smoothed moving average of the closing price.

Tunnel The nickname of the European Joint Float Agreement's total

fluctuation band of the European currencies.

Tan Book An economic report prepared by the Federal Reserve for

FOMC meetings.

Tankan Economic Survey The Japanese equivalent of the American

Tan Book, which is released by the Federal Reserve. The survey is

released on a quarterly basis.

Technical analysis The chart study of past behavior of commodity

prices for purposes of forecasting their future performance.

Theory of elasticities A model of exchange rate determination stating

that the exchange rate is simply the price of foreign exchange that

maintains the BOP in equilibrium. The degree to which the exchange

rate responds to a change in the trade balance depends entirely on

the elasticity of demand to a change in price.

Theta (T) or time decay Occurs as the very slow or nonexistent

movement of the currency triggers losses in the option's theoretical

value.

Three Buddha top formation A reversal candlestick combination. It

consists of a head-and-shoulders formation, or three consecutive

rallies in which the first and the third are of approximately the same

height, and the second is the highest.

Threshold of divergence A safety feature for the EMS that creates

an emergency exit for currencies that become the singular focus of

various adverse forces. The threshold of divergence indicates when

the specific country with the pressured currency should take

additional steps other than simple central bank intervention in the

foreign exchange markets.

Time decay See Theta.

Time value (time premium or extrinsic value) The difference between

the option premium and its intrinsic value.

Tohbu (gravestone doji) A reversal candlestick formation.

Tomorrow/next (T/N) deal A foreign exchange deal that matures the next

business day, or one day prior to the spot date.

Tonbo (dragonfly) A reversal candlestick formation.

Traditional (Charles Dow) percentage retracements Occur at 33

percent, 50 percent, and 66 percent.

Transaction exposure Potential profit and loss generated by current

foreign exchange transactions.

Translation exposure The risk of change of the consolidated corporate

earnings as a result of past volatility in the base currency.

Trend The general direction of the market, as shown by the

significant peaks and troughs of the currency fluctuations.

Trendline A straight line connecting the significant highs (peaks) in a

downtrend, and the significant lows (troughs) in an uptrend.

Triangle A continuation formation that resembles the outline of a

pennant, but without the pole. It consists of a brief consolidation

period within a solid and steep upward trend or downward trend. The

consolidation itself tends to be sloped in the opposite direction from

the slope of the original trend, or simply flat. The consolidation is

bordered by converging support and resistance lines, making it look

like a triangle. When the currency resumes its original trend by

breaking out of the consolidation, the price objective is the height of

the triangle, measured from the breakout price level.

Triple bottom A bullish reversal pattern that consists of three bottoms of

approximately equal heights. A parallel—resistance—line is drawn

against a support line, which connects these tops. The break of the

resistance line generates a move equal in size to the price difference

between the average height of the bottoms and the resistance line.

Triple top A bearish reversal pattern that consists of three tops of

approximately equal heights. A parallel—support—line is drawn

against a resistance line, which connects these tops. The break of

the support line generates a moveequal in size to the price difference

between the average height of the topsand the support line. |

TRIX Index An oscillator that consists of a one-day ROC calculation of a

triple exponentially smoothed moving average of the closing price.

Tunnel The nickname of the European Joint Float Agreement's total

fluctuation band of the European currencies.