What is a Currency Pair?

A currency pair is the quotation of two different currencies, and the value of one currency is quoted against the other. The first currency of a listed currency pair is called the base currency and the second currency is called the quote currency. Currency pairs compare the value of one currency with another: the base (or first) currency with the second or quote foreign exchange market today. It tells you how much quote currency it takes to buy one unit of the base currency. Coins are identified by an ISO currency code or the three-letter alphabetic code with which they are associated in the international market. For the US dollar, the ISO code would be USD.



Understanding Currency Pairs

Trading in currency pairs is done on the forex market, also known as the forex market. It is the largest and most liquid market in the financial world. This market allows the purchase, sale, negotiation, and speculation of currencies. It also enables currency conversion for international trade and investment. The forex market is open 24 hours a day, five days a week (including most holidays), and has a large volume of transactions All currency transactions involve buying one currency and selling another at the same time, but the currency pair itself can be viewed as a single unit, an instrument that is bought or sold forex trading platform in India. When you buy a currency pair from a forex broker, you buy the base currency and sell the quote currency. In contrast, when you sell the currency pair, you sell the base currency and receive the quote currency. Currency pairs are traded based on their bid (buy) and ask (sell) rates. The offer price is the price at which the forex broker buys the base currency from you in exchange for the free sale price or currency. The letter, also known as an offer, is the price at which the broker sells you the base currency in exchange for the exchange rate or OTC currency. In currency trading, you sell one currency to buy another. In contrast, when you trade commodities or stocks, you use cash to buy one unit of that commodity or multiple shares of a particular stock. Economic data on currency pairs, such as interest rates and economic growth or gross domestic product (GDP), influence the prices of a trading pair.

Major Currency Pairs

A common currency pair is the euro against the US dollar or is indicated as EUR / USD. In fact, it is the most liquid currency pair in the world because it is the most traded currency pair.1 EUR / USD = 1.2500 means that one euro is trading against 1.2500 US dollars. In this case, EUR is the base currency and USD is the quote currency (against currency) best broker in India for forex. This means that 1 euro can be exchanged for 1.25 US dollars. Another view is that it costs $ 125 to buy $ 100. There are as many currency pairs as there are currencies in the world. The total number of existing currency pairs changes as currencies come and go. All currency pairs are ranked based on the volume traded by a pair daily.




The currencies that trade the most against the US dollar are called major currencies, which include:

EUR / USD or euro against the US dollar

USD / JPY or dollar against the Japanese yen

GBP / USD or the British pound against the dollar

USD / CHF or Swiss francs against dollars

AUD / USD or Australian dollar against the US dollar

USD / CAD or Canadian dollar against the US dollar

The last two currency pairs are known as commodity currencies because Canada and Australia are rich in commodities and both countries are affected by their prices. The major currency pairs tend to have the most liquid markets and are traded 24 hours a day from Monday to Thursday. Currency markets open on Sunday nights and close at 5:00 p.m. Fridays. Eastern Time of the United States.

Minors and Exotic Couples

Currency pairs that are not related to the US dollar are called minority or cross currencies. These pairs have slightly wider spreads and are not as liquid as the majors, but they are still relatively liquid markets. The crosses with the highest volume belong to the currency pairs where the individual currencies are also greater. Some examples of crosses are EUR / GBP, GBP / JPY, and EUR / CHF. Exotic currency pairs include currencies from emerging markets. These pairs are not as liquid and the spreads are much wider. An example of an exotic currency pair is USD / SGD (US dollar / Singapore dollar).

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