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Currency Pair

A currency pair represents the relative value of one currency against another in the foreign exchange (forex) market. It consists of two currencies: the base currency and the quote currency. The value of the pair shows how much of the quote currency is needed to purchase one unit of the base currency. Currency pairs are traded in the forex market, and their prices fluctuate based on economic factors, interest rates, and market demand. Major currency pairs include EUR/USD, GBP/USD, and USD/JPY.

Example

In the EUR/USD currency pair, if the rate is 1.20, it means 1 Euro is equal to 1.20 U.S. dollars.

Key points

• A currency pair represents the value of one currency against another.

• The first currency is the base currency, and the second is the quote currency.

• Common pairs include EUR/USD, GBP/USD, and USD/JPY.

Quick Answers to Curious Questions

A currency pair is the exchange rate between two currencies, indicating how much of one currency is needed to buy a unit of the other.

The base currency is the first currency in the pair, and its value is compared against the quote currency, which is the second currency.

Currency pairs fluctuate based on economic conditions, interest rates, and market demand for the currencies involved.

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