What a currency pair is
In forex, you never trade a currency on its own. You always exchange one currency for another, so every price is shown as a currency pair. A pair is written as two ISO currency codes, usually with a slash: EUR/USD, GBP/USD, USD/JPY, USD/PKR. Some platforms drop the slash and show EURUSD.
Each code is a standard short name for a currency. EUR is the euro, USD is the US dollar, JPY is the Japanese yen and PKR is the Pakistani rupee. The full list is in currency codes.
Base and quote currency
The pair has two parts:
- Base currency: the first code. It is the unit being priced.
- Quote currency: the second code. It is the currency the price is expressed in.
The price tells you how many units of the quote currency you need for each unit of the base currency.
What "EUR/USD" and its price mean
Take EUR/USD. The euro is the base, the US dollar is the quote. The number next to EUR/USD is the price of the euro in US dollars, meaning how many dollars each euro costs at that moment.
- If the price rises, the euro has become more expensive in dollars. The euro has strengthened against the dollar, or the dollar has weakened against the euro.
- If the price falls, each euro buys fewer dollars.
To see a real figure, use the converter below. Set the amount field to a single unit, choose EUR as the "from" currency and USD as the "to" currency. The result is the EUR/USD rate at the European Central Bank (ECB) reference fixing. Swap the currencies to see the inverse rate, USD/EUR.
ECB reference rate of 2026-11-11. Banks and brokers apply their own rates and fees.
The ECB reference rate is published once per business day for information. A trading platform shows live prices that change constantly and has two prices, not one, so the converter result will not match a live quote exactly.
Buying and selling a pair
When you buy a pair, you buy the base currency and sell the quote currency at the same time. When you sell a pair, you do the opposite.
- Buy (long) EUR/USD: you gain if the euro rises against the dollar.
- Sell (short) EUR/USD: you gain if the euro falls against the dollar.
More on this in long and short.
A live quote has a bid (the price you can sell at) and an ask (the price you can buy at). The gap between them is the spread, a cost of trading. See bid and ask and what is spread.
Ready to try it on a real or demo account?
Partner link · trading carries a high risk of loss
Direct and indirect quotes
Whether a quote is "direct" or "indirect" depends on where you stand, meaning which currency is your home currency.
- Direct quote: the foreign currency is the base and your home currency is the quote. For a reader in Pakistan, USD/PKR is direct. It shows how many rupees each US dollar costs. Bank boards and the State Bank of Pakistan publish rupee rates this way. See SBP exchange rates.
- Indirect quote: your home currency is the base and the foreign currency is the quote. PKR/USD would show how many dollars each rupee buys. It is a very small number, which is one reason direct quotes are more common for the rupee.
The two are inverses. An indirect rate equals the result of dividing a single unit by the direct rate. The converter does this for you when you swap the "from" and "to" fields.
Market conventions
The forex market fixes which currency goes first in each pair, regardless of where the trader lives:
- EUR, GBP, AUD and NZD are normally quoted as the base against USD (EUR/USD, GBP/USD, AUD/USD, NZD/USD).
- USD is normally the base against JPY, CHF, CAD and most emerging-market currencies (USD/JPY, USD/CHF, USD/CAD, USD/PKR).
You will rarely see JPY/USD or USD/EUR on a trading platform, even though the converter can show them.
Decimal places, pips and pipettes
A forex price is shown to a fixed number of decimal places, and that number depends on the pair.
- Most pairs, such as EUR/USD or GBP/USD, are quoted with many decimals, because each unit of the base is worth roughly a similar amount of the quote.
- Pairs with the yen as quote currency, such as USD/JPY, are quoted with fewer decimals, because each base unit is worth many yen.
A pip is the standard unit for measuring a price change. Its position is fixed by convention for each pair, and for yen pairs it sits further to the left than for EUR/USD. Most platforms add an extra, smaller digit at the end of the price. That extra digit is a pipette, a fraction of a pip. On many platforms it is printed smaller or in a different style.
When you read a live quote, check which digit is the pip and which is the pipette before you count price moves. A move in the pipette digit alone is much smaller than a pip move. For the exact positions per pair, see what is a pip and pips, points, pipettes. To turn pip moves into money, use the trading calculators.
Forex pairs list: majors, crosses and exotics
Pairs are usually grouped like this:
| Pair | Base | Quote | Group |
|---|---|---|---|
| EUR/USD | Euro | US dollar | Major |
| GBP/USD | British pound | US dollar | Major |
| USD/JPY | US dollar | Japanese yen | Major |
| USD/CHF | US dollar | Swiss franc | Major |
| AUD/USD | Australian dollar | US dollar | Major |
| USD/CAD | US dollar | Canadian dollar | Major |
| NZD/USD | New Zealand dollar | US dollar | Major |
| EUR/GBP | Euro | British pound | Cross |
| EUR/JPY | Euro | Japanese yen | Cross |
| GBP/JPY | British pound | Japanese yen | Cross |
| USD/PKR | US dollar | Pakistani rupee | Exotic |
| USD/TRY | US dollar | Turkish lira | Exotic |
- Majors include the US dollar and are the most traded, so they usually have the most liquidity and tighter spreads.
- Crosses pair two major currencies without the US dollar. Their prices are derived from the dollar pairs. See cross rates.
- Exotics pair a major currency with a less traded one. Spreads are usually wider and prices can jump more.
A wider overview is on forex currency pairs.
Precise definitions for experienced readers
- Base currency: the currency of which a single unit is priced. Contract size and lot volume are counted in it.
- Quote (counter) currency: the currency the price, and so the profit or loss, is first calculated in. If your account currency differs, the platform converts the result. See profit and loss.
- Direct/indirect: relative to a home currency, not a property of the pair itself.
- Pip value: depends on lot size and the quote currency, then on the conversion to account currency.
- Pipette: the fractional price increment beyond the pip, which shows up in spreads and slippage.
A note on risk and the law
Reading a quote correctly is only the first step. Trading currency pairs as leveraged CFDs can lose money fast, including more than you planned if you use high leverage. In Pakistan, per the SECP, offshore forex/CFD platforms operate without regulatory approval in Pakistan, and per the SECP, offshore platforms have no Pakistani licence or oversight and offer no legal protection or recourse. Read law and regulators before opening any account, and practise reading quotes on a demo account first.
Frequently asked questions
How do I read a currency pair?
The first code is the base, the second is the quote. The price shows how many units of the quote currency you need for each unit of the base currency.
What is the difference between base and quote currency?
The base is the currency being priced and the one you buy when you buy the pair. The quote is the currency the price and the result are expressed in.
Is USD/PKR a direct quote?
For someone whose home currency is the rupee, yes. It shows how many rupees each US dollar costs.
Why do yen pairs have fewer decimals?
Each unit of the base currency is worth many yen, so the price is a larger number and fewer decimals are needed to show small moves.
What is a pipette?
It is the extra, smaller digit at the end of a quote, a fraction of a pip. Many platforms display it in smaller type.
Why does the converter rate differ from my trading platform?
The converter uses the ECB daily reference rate. Platforms show live bid and ask prices that move all the time and include a spread.