Currency Pair
In the Forex market, you buy and sell in currency pairs. The first currency in the pair is a base currency, and the following - a quote currency. When you place an order for a currency pair, you buy the base currency and sell the quote one.
The most tradeable and liquid pair is EUR/USD. The country codes stand for euros and US dollars, and a price quotation between them follows the pair. Let’s see how you should understand the quote. For example, EUR/USD= 1.122 means that you can exchange 1 euro for 1.122 US dollars.
The major currency pairs always contain USD and are considered to be the most popular in Forex. Minor currency pairs or crosses do not involve US dollars yet staying liquid (EUR/GBP, GBP/JPY, and EUR/CHF). Exotic currency pairs offer wider speads but deal with less popular and more volatile global currencies. If you are no expert, do not try trading exotics.
2019-08-13 • Updated