Home » Base Currency

Base Currency

« Back to Glossary Index

The base currency is the first currency in a currency pair. It compares the values between the first currency and the second currency in a currency pair.

For example, in the EUR/USD, the EUR is a base currency and the USD is the quote currency. Let us understand this through an example. If the EUR/USD is quoted at $1.0600, this means that one has to pay 1.0600 USD to purchase one Euro.

In the forex trading, currency unit prices are quoted as currency pairs.

The base currency, which is also known as the transaction currency, is the first currency appearing in a currency pair quotation.

The second part of the currency quotation is called the quote currency or the counter currency.

currency pair showing base and quote currency

For example, if you were looking at the EUR/USD currency pair, the euro would be the base currency and the U.S. dollar would be the quote currency.

In forex, currency pairs are written as XXX/YYY or simply XXXYYY.

Here, XXX is the base currency and YYY is the quote currency.

EUR/USD and USD/CAD are two examples of this format.

The abbreviations used for currencies are prescribed by the International Organization for Standardization (ISO). These codes are provided in standard ISO 4217.

Currency pairs use these codes made of three letters to represent a particular currency.

Currencies showing a currency pair are usually separated with a slash character. The slash is sometimes removed but it means the same thing.

Related
Parabolic

Parabolic describes a market that moves a great distance in a very short period of time, frequently moving in an accelerating Read more

Bitcoin Block

Blocks are data structures within the blockchain database, where transaction data in a cryptocurrency blockchain are permanently recorded. A block records Read more

Monetary Policy

Monetary policy refers to the actions taken by a nation’s central bank to influence the availability and cost of money and credit to Read more

XM Bonus