What is a Currency Pair?
Currency pairs are quotations of two country’s currencies. The pairing quotes one currency’s value against the other. The first currency in a currency pair is the base currency. The second one is the quote currency.
Currency pairs relate the value of currencies to one another. It shows the quote currency amount you need to buy 1 base currency unit.
The International Organization for Standardization (ISO) identifies currencies by a unique currency code. Currencies have a 3-letter alphabetical designation in the international market. For instance, the ISO code for the British pound is GBP.
Currency pairs with the highest trade volumes in the global market are the Majors. They include the Swiss franc, United States dollar, Canadian dollar, Australian dollar, Japanese yen, Euro, and the British pound sterling. These currencies are the typical choice among forex traders and boast high liquidity.
The EUR/USD currency pair is the forex market’s highest traded pair. It makes up almost 30% of trades on the forex market.
Trading exotic currency pairs gives you access to emerging economies in Asia, the Middle East, and Africa.