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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


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RELATED TERMS
  1. Currency Pair

    The quotation and pricing structure of the currencies traded ...
  2. Quote Currency

    The second currency quoted in a currency pair in forex. In a ...
  3. Counter Currency

    The currency used as the reference or second currency in a currency ...
  4. Base Currency

    The first currency quoted in a currency pair on forex. It is ...
  5. Reciprocal Currency

    In the foreign exchange market, a currency pair that involves ...
  6. Dollar Rate

    The exchange rate of a currency against the U.S. dollar (USD). ...
RELATED FAQS
  1. Why isn't the EUR/USD currency pair quoted as USD/EUR?

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  2. Why is currency always quoted in pairs?

    When reading currency quotes, you have probably noticed that there is only a single quote for a pair of currencies. Currency ... Read Answer >>
  3. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
  4. How do you make money trading money?

    Investors can trade almost any currency in the world. Investors, as individuals, countries, and corporations, may trade in ... Read Answer >>
  5. What is the value of one pip and why are they different between currency pairs?

    In forex markets, currency trading is done on some of the world's most powerful currencies. The major currencies traded are ... Read Answer >>
  6. How is spread calculated when trading in the forex market?

    First, remember that in the forex markets investors trade one currency for another. Therefore, currencies are quoted in terms ... Read Answer >>

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