GLOSSARY
Currency pair
Every forex price involves two currencies. The pair tells you which one you are pricing, and what you are pricing it in.
Updated 2026-09-04 · Educational content · No broker owns this site
Quick answer. A currency pair is the quotation of two currencies against each other, written as base/quote — for example EUR/USD. The price shows how many units of the quote currency it takes to buy one unit of the base currency.
You never buy or sell a currency on its own in forex. You always trade one against another, because a currency only has a price when it is measured in something else. That two-sided quotation is the currency pair.
The pair is written with a slash: EUR/USD, GBP/JPY, USD/CAD. The currency on the left is the base currency — the thing being priced, and always exactly one unit of it. The currency on the right is the quote currency — the money the price is expressed in. Buying a pair means buying the base and paying with the quote. Selling means the reverse.
How do you read a currency pair?
Read it as a sentence with the word costs in the middle. If EUR/USD is trading at 1.0850, then 1 euro costs 1.0850 US dollars. Nothing more complicated is happening.
Scaling that up is plain multiplication. To buy €10,000 at that rate you hand over 10,000 × 1.0850 = $10,850. If the pair later trades at 1.0950, that same €10,000 is now worth $10,950 — the euro strengthened against the dollar, or equivalently the dollar weakened against the euro. Those are two descriptions of one event, not two events.
Why are some pairs traded far more than others?
Because of the US dollar. In the BIS Triennial Central Bank Survey for April 2025, trading in OTC foreign exchange markets averaged $9.6 trillion per day, and the US dollar was on one side of 89.2% of all trades. The BIS also reports that the ten most traded currency pairs all involve the US dollar.
Pairs containing the dollar are called majors; pairs without it — EUR/GBP, GBP/JPY — are called crosses. Majors generally carry the tightest spreads because so much money moves through them.
One nuance worth knowing when you read BIS figures: the per-currency percentages add up to 200%, not 100%, because every single trade involves two currencies and is counted on both sides.
The mistake beginners make
Beginners often think "EUR/USD went up" means the market went up, the way a stock does. It does not. A currency pair is a ratio, so it can only ever rise for one currency by falling for the other. When EUR/USD rises, the euro gained relative to the dollar — that is the whole statement. There is no direction that is simply "up" in forex, which is why going short is no more exotic than going long.
Related terms
- Base Currency — the currency on the left, always one unit
- Quote Currency — the currency on the right, the one you pay in
- Exchange Rate — the number the pair is trading at
- Spread — why some pairs cost more to trade than others
Every term above is part of the same idea: how a forex price is written down and what it costs you to trade on it. Start at currency pair if you are reading these for the first time, or browse the full glossary.