Currency pair

From MarketsWiki
Jump to: navigation, search

In the forex market, 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.

Forex trades involve the simultaneous buying of one currency and selling of another; however, the currency pair itself can be thought of as a single instrument. If you buy a currency pair, you buy the base currency and sell the quote currency. The bid represents how much of the quote currency you need to get one unit of the base currency. When you sell the currency pair, you sell the base currency and receive the quote currency. The ask for the currency pair represents how much you will get in the quote currency for selling one unit of base currency.[1]


  1. Currency Pair. Investopedia.