Forex FAQ

How do I read Forex quotes?

Any particular price quoted in Forex is the price of one currency in terms of another, also known as an exchange rate. The currency whose symbol is on the left is called the base currency, and the currency on the right is the quote currency. Every price quoted is simply "the price of the base currency in terms of the quote currency" - which is a lot like saying that the price of GOOG (Google's stock) is really GOOG/USD (the price of Google in terms of US Dollars.)


You'll notice that many pairs are arranged a certain way and not the other way around. For instance, you'll find USD/JPY (US Dollar priced in Japanese Yen) but not JPY/USD (Japanese Yen priced in US Dollars.) That's because JPY/USD would simply be the inverse of USD/JPY.

Any time you short sell (sell to open a trade, which can be closed later with a buy order) a pair, you're effectively buying the inverse of it. So if you want to buy JPY/USD, just short sell USD/JPY for the exact same result.

If you're actually curious about the price of the inverse of any pair (eg. you see EUR/USD quoted and you want to see the current price of USD/EUR), simply type one divided by the pair's price. For example, if EUR/USD (Euros in terms of US Dollars) is quoted at 1.3400 and you want to find US Dollars in terms of Euros (USD/EUR, the inverse) then simply type 1/1.3400 into your calculator which should give you 0.7463 (which means, in this example, that one US Dollar would be priced at 0.7463 EUR.)

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