Base Currency

In terms of foreign exchange trading, currencies are quoted in pairs. This is because a trader cannot trade one currency on its own. A currency is always traded in exchange for another. The first currency in the pair is the base currency. The base currency is the currency against which exchange rates are generally quoted in a currency pair. In expressing the exchange rate, the rate is quoted as the value of the other currency in relation to 1 unit of the basic currency. For instance, when a quote of EUR/USD is said to be 1.3109, it means that 1.3109 US Dollars can be used to purchase 1 unit of the base currency. Examples: USD/JPY, the US Dollar is the base currency; EUR/USD, the EURO is the base currency.

By |2018-09-04T14:09:00+00:00September 4th, 2018|0 Comments

About the Author:


Leave A Comment