Currency Pair
Two currencies quoted against each other, showing how much of one currency is needed to buy the other.
A currency pair quotes two currencies: the base (first) and the quote (second). EUR/USD at 1.10 means one euro buys 1.10 US dollars.
A currency pair consists of two currencies where the value of one is quoted against the other. The first currency is the base currency, and the second is the quote currency. EUR/USD = 1.1000 means 1 euro costs 1.10 US dollars. Pairs split into majors such as EUR/USD and USD/JPY, crosses such as EUR/GBP, and exotics such as USD/TRY. The base is the asset you are buying or selling; the quote is its price in the other currency.
How It Works
- EUR/USD: EUR is base, USD is quote
- Price shows quote currency per 1 base currency
- Going long = buying base, selling quote
- Going short = selling base, buying quote
Types of Currency Pair
Major Pairs
Include USD (EUR/USD, GBP/USD, USD/JPY)
Minor Pairs
No USD (EUR/GBP, AUD/NZD)
Exotic Pairs
Include emerging market currency
Trading Tips
Major pairs have tightest spreads
Exotic pairs can have significant spreads
Understand which currency you're buying/selling
Related Terms
Sources
- InvestopediaCurrency pair basics
- BISMost-traded currency pairs
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