Quote currency
a.k.a. Counter currency
The second currency in a pair. The price tells you how many units of it buy one unit of the base currency.
In EUR/USD the US dollar is the quote currency (some call it the counter currency). It is the yardstick: the price 1.0850 says one euro is worth 1.0850 dollars.
Here is the part that sneaks up on people: your profit or loss on a trade is worked out in the quote currency first. Trade USD/JPY and your result comes out in yen, which your broker then converts to your account currency. That is why a pip is worth a different amount on different pairs.
Profit lands in the quote currency
- You buy 10,000 USD/JPY at 150.20 and sell at 150.50.
- The move is 0.30 yen per dollar: 10,000 × 0.30 = 3,000 yen.
- At 150.50 yen per dollar, 3,000 yen ≈ 19.93 dollars.
Bottom line: Your gain arrived in yen and only became dollars after conversion.
Assuming every pip is worth the same in dollars. On pairs where the dollar is not the quote currency, the pip value shifts with the exchange rate.
Keep this word for good
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