Mois : septembre 2020

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake. 71% of retail client accounts lose money when trading CFDs, with this investment provider. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Understanding Base Currencies

Base currency (also called transaction currency) is always given first in a currency pair; quote currency (also called counter currency) is given second. This is similar to the AUDUSD and NZDUSD pairs, for example, as both the Australian and New Zealand dollar have historically had a close link to the British pound. There are several factors to consider when it comes to choosing a base currency. Some traders have a preferred currency while others often look at liquidity in the market.

What are base currency and quote currency used for?

1. As long as you create your conversion before the cut off time, the conversions will settle on the same day.
2. This analysis helps traders make informed decisions about when to buy or sell a currency pair to maximize profits.
3. ‘Out of the money’ is one of three terms used to describe an option’s value, or ‘moneyness’.
4. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
5. However, the position of currencies in a currency pair is not determined by the liquidity of the currency or its strength.
6. Some may also have a preferred currency that they always use as a base currency.

Investors generally buy the pair if they think that the base currency will gain value in contrast with the quote currency. On the other hand, they may decide to sell the pair if they think that the base currency will lose value in contrast with the quote currency. In a direct quote, the base currency is a foreign currency while the quote currency is the local currency. So, in our example, the quote is direct, because the quote currency — US Dollars — is your local currency. The first currency listed is referred to as the base currency; GBP and EUR would be the respective base currencies for the above examples.

They represent some of the world’s largest economies and are traded in high volumes. The company then has to pay no more and no less than £89,000 whether the US dollar rises or falls in the future. An example of an exotic currency pair is the USD/SGD (U.S. dollar/Singapore dollar).

Minor currencies and minor currency pairs

For example, you might see GBP/AUD, EUR/USD, USD/JPY, GBPJPY, EURNZD, and EURCHF. Base currency and quote currency are fundamental concepts in forex trading. They determine the value of currency pairs and play a crucial role in trading decisions. By understanding these concepts, traders can develop effective strategies to capitalize on changes in exchange rates and maximize profits. Base currency and quote currency play a crucial role in determining the value of a currency pair and calculating profits and losses in forex trading. The exchange rate of a currency pair represents how much of the quote currency is needed to purchase one unit of the base currency.

You should consider whether you understand how this product works, and whether you can afford to take the high risk of losing your money. Understanding base currency and quote currency is essential for developing effective trading strategies in the forex market. Traders often look for currency pairs where the base currency is expected to strengthen against the quote currency or vice versa. This analysis helps traders make informed decisions about when to buy or sell a currency pair to maximize profits. The final two currency pairs are known as commodity currencies because both Canada and Australia are rich in commodities and both countries are affected by their prices. The major currency pairs tend to have the most liquid markets and trade 24 hours a day Monday through Thursday.

Currency pair

The currency markets open on Sunday night and close on Friday at 5 p.m. Understanding base quote currency is fundamental to navigating the forex market. Whether you’re a developer integrating forex data into an application or a business involved in international trade, knowledge of base quote currency is essential. It forms the basis of how currencies are traded and valued in the global marketplace. A base currency is the first currency that appears in a forex pair quotation.

This guide delves into the different types of market indices, why it can be beneficial to trade them as CFDs, and covers some popular index trading st… If he expects the price to rise, he buys USD and can sell them again at a later date when the price has risen, thus making a profit. By registering, I agree to the Privacy Policy and allow ALT 21 to process my information and send me any other information about its products, services and news. If you feel something isn’t right, then please let us know by emailing us at

For example, a British bank may use GBP as a base currency for accounting, because all profits and losses are converted to sterling. If a EUR/USD position is closed out with a profit in USD by a British bank, then the rate-to-base will be expressed as a GBP/USD rate. This ambiguity leads many market participants to use the expressions currency 1 (CCY1) and currency 2 (CCY2), where one unit of CCY1 equals the quoted number of units of CCY2.

By registering, I agree to the Privacy Policy and allow ALT21 to process my informationand send me any other information about its products, services and base currency and quote currency news.

1. Nonetheless, when trading currencies, investors are selling one currency in order to buy another.
2. In the case of the EURGBP pair, some UK institutions use the GBPEUR quote, the British pound being their natural base currency.
3. The bid price represents the amount of quote currency needed to receive one unit of the base currency.
4. 91.13% of retail investor accounts lose money when trading Online Forex/CFDs with this provider.
5. The U.S. dollar, or USD, is one of the most common base currencies in the forex market.
6. Forex quotations are stated as pairs because investors simultaneously buy and sell currencies.

In an indirect quote, on the other hand, the base currency is the local currency and the quote currency is a foreign currency. So if you’re in the UK and your quote to exchange money into Euro is shown as GBP/EUR, for instance, this would be an indirect quote. In this example, the Euro is the base currency and the US Dollar is the quote currency.

This means that a trader has to use more U.S. dollars to buy a single Euro. Forex/CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 91.13% of retail investor accounts lose money when trading Online Forex/CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.