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What is a currency pair?

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Okay, time to bust some jargon and take it down to the basics. When you look at the tickers on any Forex website or brokerage, you will see currencies in pairs.

They look like this:

Starttrading.com - Currency Pair

Let’s take GBP/USD from this example. As we can see – GBP/USD is trading at 1.31152. In simpler terms, all that this is telling us is how much of the second currency we can buy with the first currency.

In this instance, £1 will buy you $1.311.

Now let’s say that the market strengthens due to some good news coming out about UK employment statistics. The pound strengthens. The rate now goes up to 1.36.

This means £1 will now buy you $1.36 – simple stuff!

The first currency in the pair is referred to as the QUOTE currency, with the second being the BASE currency.

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