Therefore the exchange rate is always composed of two currencies, iecurrency pair, one of which will be the base, the other quote. For example,
EUR / USD, EURUSD - Euro-dollar
On the left (EUR) is the base currency - the currency you are buying or selling.
Right (USD) is quoted currency - it shows the value of the base currency.
Types of currency pairs
pairs involving the U.S. dollar and currencies of developed countries are called major or majors (major), these include:EUR / USD, GBP / USD, AUD / USD, NZD / USD, USD / JPY, USD / CHF, USD / CAD
Currency pairs with the dollar and the currencies of developing countries called exotic, such as:
USD / HKD (Hong Kong Dollar), USD / SGD (Singapore Dollar), USD / NOK (Norwegian Krone), etc.
Of course, not all currency pairs are traded in U.S. dollars. Currency pairs without the U.S. dollar are called cross rates:
Direct and reciprocal rate
As you can see, the same currency can be as commodities to be bought and the means of payment. Therefore, there are
- direct quote - how much currency you can get for one another, for example, to the U.S. dollar
EUR / USD, AUD / USD, GBP / USD
- direct quote - how much foreign currency can be obtained in one of the national, such as
If you are familiar with these concepts - boldly go to the first class technical analysis when rates fall, and when growing
