Currency pair
a.k.a. Pair
Two currencies quoted against each other, like EUR/USD, showing how much of the second it takes to buy one unit of the first.
In forex you never trade one currency alone. You always trade a pair: buying one currency means selling the other at the same time. It is a tug-of-war, and the price tells you who is winning.
The first currency is the base currency and the second is the quote currency. GBP/USD at 1.2700 means one British pound costs 1.27 US dollars. If that number climbs, the pound is muscling ahead. If it sinks, the dollar is fighting back.
Pairs come in families. The busiest ones, all involving the US dollar, are the majors. Then there are minors and the wild, thinly traded exotics.
Reading GBP/USD = 1.2700
- Base currency: GBP (the British pound). Quote currency: USD (the US dollar).
- 1 pound costs 1.2700 dollars.
- So 1,000 pounds cost 1,000 × 1.2700 = 1,270 dollars.
Bottom line: If GBP/USD rises to 1.2800, those same 1,000 pounds are worth 1,280 dollars, 10 dollars more.
Reading the pair backwards. Buying GBP/USD is a bet that the pound beats the dollar, not the other way round.
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