Currency pair

In forex you always trade one currency against another, so prices are quoted in pairs. The first currency is the base currency; the second is the quote currency.

Reading a pair

GBP/USD at 1.2700 means one pound costs 1.2700 US dollars. Buying GBP/USD means buying pounds and selling dollars; selling it means the reverse. The three-letter codes come from the ISO 4217 standard: USD, EUR, JPY, GBP, CHF, CAD, AUD, NZD and so on.

Groups of pairs

• [Major pairs](/glossary/major-pair): the most traded pairs, usually defined as the US dollar against EUR, JPY, GBP, CHF, CAD, AUD and NZD.
• [Cross pairs](/glossary/cross-pair) or minors: pairs without the dollar, such as EUR/GBP or AUD/JPY.
• [Exotic pairs](/glossary/exotic-pair): a major currency against an emerging-market or smaller currency, such as USD/TRY or EUR/PLN.

Majors are generally the most liquid and cheapest to trade; exotics the least liquid and most expensive.

Worked example

You buy 10,000 units (a mini lot) of AUD/USD at 0.6600. Price rises to 0.6630, a 30-pip move. Each pip on a mini lot of a USD-quoted pair is worth 1 dollar, so the gain is 30 dollars before costs. A 30-pip fall would be a 30-dollar loss.

Practical note

Many pairs have nicknames: "cable" for GBP/USD, "fiber" for EUR/USD, "loonie" for USD/CAD, "kiwi" for NZD/USD. See currency pairs explained and the EUR/USD profile.