Currency Pairs, Base Currency and Quote Currency
In GBP/USD, GBP is the base and USD is the quote. A price of 1.27000 means one pound is valued at 1.27 dollars. Buying the pair creates long base and short quote exposure.
Learning outcomes
✓ Explain base and quote currencies
✓ Explain major, minor and exotic
✓ Explain inverting a quote
Course curriculum
1. Base and quote currencies · 12 min
In GBP/USD, GBP is the base and USD is the quote. A price of 1.27000 means one pound is valued at 1.27 dollars. Buying the pair creates long base and short quote exposure.
2. Major, minor and exotic · 12 min
Major pairs include the US dollar and another heavily traded currency. Crosses omit the US dollar; exotic pairs can involve less-liquid currencies. Spreads and trading conditions vary.
3. Inverting a quote · 12 min
To reverse a currency conversion, take the reciprocal of the rate. If a rate is 1.25, its inverse is 0.8. A tradable reverse quote also needs the bid and ask swapped and inverted.