How Forex is Quoted
Currencies are quoted in pairs, such as EUR/USD or USD/JPY. The first listed currency is known as the base currency, while the second is called the counter or quote currency. The base currency is the "basis" for the buy or the sell. For example, if you BUY EUR/USD you have bought euros (simultaneously sold dollars). You would do so in expectation that the euro will appreciate (go up) relative to the US dollar.
GBP/USD
In this example British Pound is the base currency and thus the "basis" for the buy/sell.
If you believe that the US economy will continue to weaken and this will hurt the Dollar, you would execute a BUY GBP/USD order. By doing so you have bought in the expectation that they will appreciate versus the US dollar. If you believe that the US economy is strong and the Pound will weaken against the US dollar you would execute a SELL GBP/USD order. By doing so you have sold Pounds in the expectation that they will depreciate versus the US dollar.
Currency Abbreviations
| USD |
US Dollar |
| EUR |
Euro |
| JPY |
Japanese Yen |
| GBP |
British Pound |
| CHF |
Swiss Franc |
| AUD |
Australian Dollar |
| NZD |
New Zealand Dollar |
| CAD |
Canadian Dollar |
The InterForex trading platform quotes the following pairs:
| EUR/USD |
CAD/JPY |
| USD/JPY |
AUD/JPY |
| GBP/USD |
EUR/AUD |
| USD/CHF |
EUR/CAD |
| EUR/GBP |
AUD/CAD |
| EUR/JPY |
GBP/CAD |
| AUD/USD |
GBP/NZD |
| EUR/CHF |
GBP/AUD |
| GBP/JPY |
AUD/NZD |
| USD/CAD |
CAD/CHF |
| GBP/CHF |
NZD/JPY |
| NZD/USD |
USD/SGD |
| CHF/JPY |
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