Reciprocal Currency

AAA

DEFINITION of 'Reciprocal Currency'

In the foreign exchange market, a currency pair that involves the U.S. dollar (USD) but where the USD is not the base currency. For example, the currency pair NZD/USD has the New Zealand dollar as its base currency and the USD as its quote currency. A currency that is quoted as dollars per unit of currency instead of in units of currency per dollar.

INVESTOPEDIA EXPLAINS 'Reciprocal Currency'

Reciprocal currency describes currency pairs used in the foreign exchange market where the U.S. dollar (USD) and another currency are paired, but where the USD is not the first currency quoted. Major currency pairs that involve the USD but where the USD is not the base currency include EUR/USD (Euro and U.S. dollar); GBP/USD (British pound and U.S. dollar); and AUD/USD (Australian dollar and U.S. dollar).

RELATED TERMS
  1. Reciprocal Currency Arrangement

    Temporary arrangement between central banks to maintain a supply ...
  2. Paris Pair

    The nickname for the U.S. Dollar/French Franc currency pair prior ...
  3. Major Pairs

    The four forex pairs which are considered to be the most heavily ...
  4. Commodity Pairs

    The three forex pairs which include currencies from countries ...
  5. Currency Pair

    The quotation and pricing structure of the currencies traded ...
  6. Currency Carry Trade

    A strategy in which an investor sells a certain currency with ...
Related Articles
  1. Why isn't the EUR/USD currency pair ...
    Forex

    Why isn't the EUR/USD currency pair ...

  2. Understanding The Spread in Retail Currency ...
    Forex Education

    Understanding The Spread in Retail Currency ...

  3. Main Factors That Influence Exchange ...
    Forex

    Main Factors That Influence Exchange ...

  4. How To Calculate An Exchange Rate
    Forex Fundamentals

    How To Calculate An Exchange Rate

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center