What Is a Currency Pair?

In forex trading, a currency pair represents the exchange rate between two currencies. It consists of:

• Base Currency – The first currency in the pair.
• Quote Currency – The second currency, showing the value of one unit of the base currency.

For example, in GBP/JPY:

• GBP (British Pound) is the base currency.
• JPY (Japanese Yen) is the quote currency.

If GBP/JPY = 150.25, it means 1 British pound is worth 150.25 Japanese yen.

Currency pairs are fundamental to forex trading, allowing traders to speculate on the price movements between different currencies.