Forex Walkthrough

AAA

Introduction - Currency Quotes

Currencies are quoted in pairs, for example the USD/EUR is the U.S. dollar/euro. Using this quotation, the value of a currency is determined by its comparison to another currency. The first currency of a currency pair is called the base currency, and the second currency is called the quote currency. The currency pair shows how much of the quote currency is needed to purchase one unit of the base currency.

For example, if the USD/EUR currency pair is quoted as being USD/EUR = 0.8000 and you purchase the pair; this means that for every 0.80 euros you sell, you purchase (receive) US$1. If you sell the currency pair, you will receive 0.80 euros for every US$1 you sell. The inverse of the currency quote is EUR/USD, and the corresponding price would be EUR/USD = 1.25, meaning that US$1.25 would buy 1 euro. (To learn more, read Why is currency always quoted in pairs?)

Most Traded Pairs
comments powered by Disqus
Related Articles
  1. Simple Moving Averages Make Trends Stand ...
    Active Trading Fundamentals

    Simple Moving Averages Make Trends Stand ...

  2. Texas Ratio Rounds Up Bank Failures
    Personal Finance

    Texas Ratio Rounds Up Bank Failures

  3. Foreclosure Opens Doors For Real Estate ...
    Home & Auto

    Foreclosure Opens Doors For Real Estate ...

  4. Valuing Firms Using Present Value Of ...
    Fundamental Analysis

    Valuing Firms Using Present Value Of ...

  5. How to Value Companies With Negative ...
    Fundamental Analysis

    How to Value Companies With Negative ...

Trading Center