Quote Currency
Categories: Trading
Currencies come in pairs. They don't mate for life, like lobsters or ducks. But when they get traded on financial exchanges, the transactions only take place in twosomes. Kind of like a tango contest: you don't always have the same partner, but you do always have a partner.
Anyway, each part of the currency pair has a name. There's the base currency and the quote currency. The base currency always has a value of one. For purposes of the exchange, you are turning one of those into some number of the other currency. That other currency is the quote currency.
Pair names are given as a combo of the three-letter signifiers of the currencies involved. The euro is denoted by the three-letter symbol "EUR." The dollar is known by "USD." The British pound is "GBP." And so on.
The euro versus the dollar pair is EUR/USD. The euro versus the pound is EUR/GDP.
The first currency is the base currency (it gets the value of one) in both examples: EUR. The second listed currency is the quote currency...the USD or GDP.
