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Trading Currency Pairs Explained - Sample Exchange Rate for Pairs

Using the EURUSD pair as a model, learn step-by-step currency trading techniques and strategies for Forex markets.

There are the base currency and the quote currency for trading a forex currency pair. The EURUSD example is used to explain the base currency and the quote currency in the following:

Guide to Trading EURUSD Forex Pair - Base Currency and Quote Currency Basics

EURUSD is a key forex pair, so we'll use it as our example here.

EUR USD

  • Base Currency - EUR

Base Currency is the first currency in a currency pair (EUR). The Base is equivalent to 1 unit of the first currency(base).

  • Quote Currency - USD

The quote currency is the second one in a pair, like USD. It shows the base currency's value against it.

EURUSD Exchange Rate Explained

If EUR USD currency exchange rate quote = 1.2000

It means the ratio of 1 EUR:USD = 1 : 1.2000

Hence it means that 1 Euro = 1.2000 US dollars

An Examination of Currency Exchange Rates on the Four Platform

How to Understand Currency Pairs for Trading - Explanation of Currency Pairs Exchange Rates

Understanding Currency Pair Trading: Explanation of Exchange Rates for Currency Pairs

EURUSD - Currency Pair

In a currency pair setup, EUR represents the base currency, while USD functions as the quote currency.

Base Currency

Quote Currency

EURUSD
11.20000

The base currency equals one unit. The quote shows the rate in the other currency.

So, if the EURUSD currency pair is at 1.20000, that means 1 Euro can buy 1.2 US dollars. For every 1 Euro you have, you can get 1.2 dollars.

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