Base currency has a particular significance in relation to IG's platform. Here, we define base currency in general investing and explain what it means to you when trading with IG.
In trading the term base currency has two main definitions:
When buying (or going long on) a currency pair with IG, the base currency is the single unit being bought. It is also known as the primary currency.
The second currency in the pair is known as the quote (or the counter currency), and represents the amount of that particular currency needed to buy a single unit of the base currency. As such, a long forex trade will involve buying the base currency while selling the quote currency.
For instance, when trading EUR/USD, the euro is the base currency and the US dollar is the quote. If it is trading at 1.0502, then 1.0502 dollars would be needed to buy a single euro.
The base currency on IG's platform refers to your account currency, or the main currency you chose to operate in when you open your IG account.