When it comes to Forex, a currency pair is two different currencies paired together.
For example, the EUR/USD currency pair. The first currency listed is called the base currency, while the second is called the quote currency.
In this case, the EUR is the base currency and the USD is the quote currency.
When you trade in Forex, you’re effectively buying and selling two different currencies at once.
That’s why it’s important to understand what a Forex pair or currency pair is before you start trading.There are three main types of currency pairs: major, minor and exotic.
Major currency pairs are the most traded and include the USD/EUR, USD/GBP and USD/JPY.
Minor currency pairs are less traded and include pairs such as the EUR/GBP and GBP/JPY.
Exotic currency pairs are those that include a more volatile currencies, such as the Mexican Peso or South African Rand.
Knowing which type of Forex pair or currency pair you’re trading can help you better understand the risk involved and make more informed trading decisions.
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