Synonyms: Currency Pairs
A currency pair is two different currencies, with the value of one of the currencies quoted against the value of the other. Essentially a currency pair is how you compare one currency with another.
The first currency (the base) is valued against the second (the quote), which shows you how many of the quote currency is required to purchase one unit of the base.
Suppose the Euro is trading at 1.2200 US Dollars and you believe the Euro is going to appreciate against the Dollar. You would buy (or go “long”) on the EURUSD pair.
You have just simultaneously bought Euros and sold US Dollars.
If you are correct and the Euro appreciates to 1.2700 you would sell Euros you bought at 1.2200 at the new rate of 1.2700.
All Forex trading is done in terms of currency pairs. The following pairs are commonly traded:
|EURUSD||Euro / US Dollar||EuroDollar|
|GPBUSD||British Pound/US Dollar||Cable|
|USDJPY||US Dollar / Japanese Yen||DollarYen|
|USDCHF||US Dollar / Swiss Franc||DollarSwiss or “Swissie”|
|USDCAD||US Dollar / Canadian Dollar||DollarCanada|
|AUDUSD||Australian Dollar / US Dollar||AussieDollar|
|EURGBP||Euro / British Pound||EuroSterling|
|EURJPY||Euro / Japanese Yen||EuroYen|
|EURCHF||Euro / Swiss Franc||EuroSwiss|
|GBPCHF||British Pound / Swiss Franc||SterlingSwiss|
|GBPJPY||British Pound / Japanese Yen||SterlingYen|
|CHFJPY||Swiss Franc / Japanese Yen||SwissYen|
|NZDUSD||New Zealand Dollar / US Dollar||NewZealandDollar or “Kiwi”|
|USDZAR||New Zealand Dollar / US Dollar||DollarZar|