Quote Currency Definition – What is Quote Currency? | CFI LB

quote currency

When trading foreign currency exchange, you will always see currencies represented in pairs. The first currency quoted in the pair is the base currency (also known as the primary currency). The second currency in the pair is the quote currency (also known as the counter currency).

 

You buy when you think the base currency will strengthen relative to the quote currency and sell when you think the base currency will weaken relative to the quote currency.

 

If we look at the EUR/USD, the USD is the quote currency. If you buy the pair and the euro rises versus the US Dollar, you will make a profit. If the Euro drops in value versus the US Dollar, you will incur a loss. It is useful to understand the reasons individuals might choose to trade forex over more traditional investments.

 

Forex trading is frequently referred to as “trading” because many active participants in the forex market tend to do short-term, intraday trades.

 

This is partly because, unlike some other financial markets, there are usually significant price fluctuations in the forex market during any given trading day which is magnified by the availability of leverage.

 

Key takeaways:

 

  • In a currency pair, the first currency quoted in the pair is the base currency (also known as the primary currency).
  • In a currency pair, the second currency in the pair is the quote currency (also known as the counter currency).
  • There are usually significant price fluctuations in the forex market during any given trading day.
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CFI provides execution-only services and does not provide any investment advice. To make an investment decision, you cannot rely on the content of this website, or on any information, opinion, report or other materials (“Information”) you receive from CFI, or its representatives. Such Information is general and does not consider your objectives and your financial situation, thus they shall not be considered in any way as an express or implied promise nor a guarantee of any profit or limit of loss. CFI shall not bear any liability in case you used or relied on such Information. Please ensure that you make your own research and seek independent advice if necessary.

Forex and CFDs are leveraged products that incur a high level of risk. A small adverse market movement may expose the client to lose the entire invested capital. The majority of retail client accounts lose money when trading in CFDs. Please be aware of trading risks and that you could sustain a loss exceeding your deposited funds, even if a stop loss is used.

CFI Lebanon is regulated by the Banque du Liban and the Capital Markets Authority

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