In forex, currencies are traded in pairs. The first currency is called the base currency and the second currency is called the quote currency. So for example, EURUSD, means that the base currency is the Euro and the quote currency is the USD. The quote currency is sometimes referred to as the counter currency. The best way to understand base and quote currencies is in terms of exchange rates. An exchange rate of 1.14020, for example, would mean that 1 unit of base currency would cost 1.14020 units of quote currency. So in this case, to own 1 EUR the equivalent of 1.14020 USD is needed. In other words, the first currency in a pair is quoted against the second currency.
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