Quotes in Forex

We mentioned above that currencies are always traded in pairs; this is because when you buy one you’re essentially selling the other and vise versa.

So how do you read an FX quote？

E.g. EUR/USD = 1.1200
This means that 1 € = 1.12 $
EUR; in this quote EUR is known as the base currency.
USD; in this quote USD is known as the counter or quote currency.

This quote is also referred to as a direct quote which is where US Dollar is the counter or quote currency

E.g. USD/JPY = 125.00
This means 1 $ = 125 ¥
USD; in this quote USD is known as the base currency.
JPY; in this quote JPY is known as the counter or quote currency.

This quote is also referred to as an indirect quote which is where US Dollar is the base currency