Currency Pair (คู่สกุลเงิน)
A currency pair shows the price of one currency measured in another, such as EURUSD, where the first currency is the base and the second is the quote.
In forex you always trade one currency against another, so prices are shown as a currency pair. Each pair has two parts:
- Base currency: the first currency in the pair. It is the one being priced, and it always equals 1 unit.
- Quote currency: the second currency. It shows how much of it you need to buy 1 unit of the base currency.
Example with EURUSD
If EURUSD is quoted at 1.1000, then 1 euro (EUR, the base) costs 1.1000 US dollars (USD, the quote).
- If you buy EURUSD, you are buying euros and selling US dollars. You hope the euro gets stronger against the dollar.
- If you sell EURUSD, you are selling euros and buying US dollars. You hope the euro gets weaker against the dollar.
If the price moves from 1.1000 to 1.1050, the euro has become worth more in US dollars. The price moved up by 50 pips.
Why it matters
The price of a pair goes up when the base currency gets stronger compared with the quote currency, and goes down when it gets weaker. The price alone does not tell you which currency is moving, only the relationship between the two.
Common beginner mistake
Many beginners mix up buy and sell. Buying a pair always means buying the base currency, not the quote. Always check which currency comes first before you place a trade.
Gold is quoted in a similar way: XAUUSD shows the price of 1 ounce of gold (XAU) in US dollars.