Quote currency definition

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The quote currency is the second currency listed in a forex pair. It is also known as the counter currency.

The price of a forex pair reflects how much it costs to purchase one unit of the base currency by selling the quote currency.

In a pair listed as GBP/USD, USD is the quote currency. In EUR/CHF, CHF is the quote currency. The first currency listed is referred to as the base currency; GBP and EUR would be the respective base currencies for the above examples.

Quote currency example

If GBP/USD is at 1.5000, for instance, then one British pound is equal in price to $1.5000. If the base currency (the pound) increases in value or the quote currency (dollar) drops, the amount of dollars needed to buy one pound will increase. If the base drops in value or the quote increases, the opposite effect will occur.

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Read the forex guide for more of the vocabulary associated with forex trading.

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