Currency Pair
Two currencies quoted against each other, showing how much of the second is needed to buy one unit of the first.
Example
EUR/USD 1.1000 means one euro costs 1.10 US dollars.
Important
A pair is always relative: a trade can lose even if the currency you favoured strengthened, if the other one strengthened more.
Related terms
- Base Currency — The first currency in a pair, the one being priced.
- Quote Currency — The second currency in a pair, in which the price of the base currency is stated.
- Pip — The standard smallest price increment for a currency pair, usually 0.0001 for most pairs.
Lessons that explain it
- Every currency trade is a bet on two countries at once — A forex position is always one currency against another. Retail traders usually hold it through leveraged broker products, while every international investor already holds currency risk without trading at all. (9 min)
All 578 terms in the Investing glossary