05. What are Base and Quote Currencies?

 

In forex, currencies are traded in pairs. The first currency in a pair (highlighted down the picture in green) is called the BASE CURRENCY. 

The second currency in a pair (highlighted down the picture in orange) is called the QUOTE CURRENCY. 

The QUOTE CURRENCY is sometimes referred to us the COUNTER CURRENCY. The best way to understand base and quote currencies is in terms of exchange rates. An exchange rate of 1.14020, for example, would mean that 1 unit of base currency would cost 1.14020 units of quote currency. 

So, in this case, to own 1 EUR (Euro) is equivalent of 1.14020 USD (U.S Dollar) is needed. And that's it, thank you for reading this blog, see you in the next blog. God Bless :-)