What Are Currency Pairs

CFD currency trading works by trading asset pairs. How exactly does it work and what is it good for? Keep reading.

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A currency pair is the citation of two distinct monetary currencies, with the estimation of one currency being cited against the other. The first listed currency of a currency pair is called the base currency, and the following currency is known as the quote currency.

Currency pairs compare the value of one currency to another—the base currency (or the first one) versus the second, or the quote currency. It shows how much of the quote currency is required to buy one unit of the base currency. Currencies are recognized by an ISO currency code, or the three-letter alphabetic code they are associated with on the international market. So, for the U.S. dollar, the ISO code would be USD.