Currency Pairs Explained
Learn how forex pairs work and how to read quotes
4 sections · 3 quiz questions · ~5 min read
Base & Quote Currency
Currency pairs are written as BASE/QUOTE (e.g., EUR/USD). The base currency comes first. The price tells you how much of the quote currency you need to buy one unit of the base currency.
Major Pairs
Major pairs include USD and are the most traded: EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, NZD/USD, USD/CAD. They have the highest liquidity and tightest spreads, making them ideal for beginners.
Minors & Exotics
Minor (cross) pairs don't include USD — like EUR/GBP or AUD/NZD. Exotic pairs combine a major currency with an emerging market currency (USD/ZAR, EUR/TRY). Exotics have wider spreads and higher volatility.
Reading a Quote
If EUR/USD = 1.0850, you need $1.0850 to buy €1. When the price rises to 1.0900, the euro has strengthened (or the dollar weakened). When it falls to 1.0800, the euro has weakened against the dollar.
Quick check
Did it stick?
Try to answer each one before you peek at the explanation.
1
In EUR/USD, which is the base currency?
2
Minor (cross) pairs always include the US Dollar.
3
Classify each pair:
EUR/USD→Major
EUR/GBP→Minor
USD/ZAR→Exotic