Currency pair
A currency pair is the price of one currency in another. In EUR/USD the euro is the base and the dollar is the quote; the price shows how many dollars one euro costs.
How it works
In forex, currencies always trade in pairs: when you buy one, you sell the other at the same time. The first currency is the base, the second is the quote. If EUR/USD = 1.0850, one euro buys 1.0850 dollars.
Buying a pair (going long) is a bet that the base currency will strengthen against the quote. Selling (going short) is the opposite bet. Every pair has two prices: the bid (where you sell) and the ask (where you buy); the gap between them is the spread.
Pairs come in groups. Majors include the dollar and the most traded currencies: EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD, NZD/USD. Crosses leave out the dollar (EUR/GBP), and exotics include currencies of smaller economies and usually have wide spreads.
EUR/USD rises from 1.0850 to 1.0900, a move of 50 pips. On 1 standard lot (100,000 euros) one pip is worth $10, so the buyer makes 50 × $10 = $500 and the seller loses the same.
USD/JPY = 150.00 means 1 dollar costs 150 yen. If the pair rises to 151.00, the dollar has strengthened against the yen and the yen has weakened.
Beginners mix up direction: they see the dollar weakening and buy USD/JPY, when they should be selling it. Always say it to yourself: buying a pair means buying the first currency and selling the second. And start with the majors: they have the tightest spreads and the most information available.
Questions and answers
What is a currency pair in simple terms?
It is the price of one currency in another. EUR/USD = 1.10 means one euro costs 1.10 dollars.
Which currency is the base in a pair?
The base is always first. In GBP/USD it is the pound, in USD/JPY it is the dollar. The price shows how much of the quote currency you get for one unit of the base.
Which currency pairs are best for beginners?
Usually the majors, especially EUR/USD: they are highly liquid and have tight spreads. Exotic pairs move more sharply and cost more to trade.
Related terms
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Updated: 2026-10-19