What is Forex Currency Pair?

Before knowing about base currency and quote currency, let us first know about currency pairs.

A currency Pair is a structure of deciding quotation and pricing of the currencies traded in the forex market. And the value of a currency is a variance rate and is always determined by its comparison to another currency.

We already know that, in the forex market, the currencies are exchanged. As of current date, there are approximately 180 legal currencies circulating throughout the world. So it is theoretically possible to exchange a single currency with 179 different currencies.

So the question is that, how would we know which currency has been exchanged against which other currency?

To solve this confusion when buying or selling forex it is essential to mention those two currencies as a pair, one which we bought and another which we sold in order to buy the first one.

We generally denote currency pairs as follows: First Currency / Second Currency (for e.g.- EUR/USD).

Currency pairs are also categorized as Major, Minor, Cross-currency, and Exotic currency pairs which we would discuss later.