Currency Pairs

Currency pairs represent the value of one currency in relation to another in the foreign exchange market. Each pair consists of two currencies: the first is the "base currency," and the second is the "quote currency." For instance, in the pair EUR/USD, the Euro is the base currency, and the US Dollar is the quote currency. The exchange rate indicates how much of the quote currency is needed to purchase one unit of the base currency. Traders use these pairs to speculate on currency movements, influencing global trade, investments, and economic relations.