Currency pairs. Base and quote currencies. Majors and crosses

Currency pairs. Base and quote currencies. Majors and crosses

Currencies on the FX market are always traded in pairs. In order to find out the relative value of one currency, you need another currency to compare. When you buy one currency, you automatically sell another currency.

EUR/USD base and quote currencies

Currency pairs in Forex are given in abbreviations. For instance, EUR/USD stands for the euro versus the US dollar, and USD/JPY stands for the US dollar versus the Japanese yen. If you buy EUR/USD, you are buying euros and selling dollars. If you sell EUR/USD, you are selling euros and buying dollars.

Base and quote curencies

The first currency in the pair is called the base currency, while the second currency is called the quote or counter currency. The price of the base currency is always calculated in units of the quote currency.

For example, the exchange rate for the EUR/USD pair is 1.1000. It means that one euro costs 1.1000 US dollars (one dollar and 10 cents).

Majors, Crosses, Exotic pairs

Currency pairs are usually divided into majors, crosses, and exotic pairs. All the major pairs include the US dollar and are very popular among the traders: EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD etc.

EUR/USD base and quote currencies

Crosses consist of two popular currencies, but do not include the US dollar. The most common crosses include the euro, the yen, and the British pound: EUR/GBP, EUR/JPY, GBP/JPY, EUR/AUD etc.

crosses pairs

Exotic currency pairs consist of one major currency and one currency, representing the developing (Brazil, Mexico, India etc.) or small (Sweden, Norway etc.) economy. Exotics are rarely traded on Forex and usually have less attractive trading conditions. 

EUR/USD base and quote currencies

 

Latest news

Currency market on December 9

The main attention of traders is paid to the news concerning the US-China developments ahead of the US tariffs deadline scheduled on December 15.

5 important events this week will bring us

The UK Parliament election, American and European interest rates announcements and monetary policy press conferences - all of these are going to take place this week.

Is the Fed holding the rate?

The Federal Funds Rate is announced at 21:00 MT time on December 11.

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