Currency Pair

A currency pair is the quotation of two different currencies in the Forex market. It shows how much of one currency is needed to buy one unit of the other. Currency pairs are always written in a specific format, with the base currency listed first and the quote currency (or counter currency) listed second. For example, in the EUR/USD pair, the euro (EUR) is the base currency, and the US dollar (USD) is the quote currency. If the pair is trading at 1.1000, it means that 1 euro is worth 1.10 US dollars.

Currency pairs are divided into three main categories: major pairs, minor pairs, and exotic pairs. Major pairs include the most traded currencies worldwide, such as EUR/USD, GBP/USD, and USD/JPY. Minor pairs, also known as cross-currency pairs, do not include the US dollar. Examples are EUR/GBP or AUD/JPY. Exotic pairs consist of one major currency and one from a smaller or emerging market. Examples include USD/TRY (US dollar/Turkish lira) or EUR/ZAR (euro/South African rand).

Understanding currency pairs is essential for Forex traders. This is because price movements in the Forex market are always relative—one currency strengthens while the other weakens. Finding a trustworthy broker that offers a wide arrange of pairs is also essential. Learn more in our markets section, or check out our different accounts.

Browse through other terms in our Trader’s Dictionary.