The quote currency states how much is needed to buy one unit of base currency. The quoted currency’s value depends on the exchange rate of the base currency. In trading, when a trader opens a long (buy) position, they will buy the base currency and, at the same time, sell the quote currency.
What is the difference between a base currency and a quote currency?
The quote currency is the second currency listed in a currency pair. The base currency is the currency that is used to express the rate of exchange and represents the value of a unit of the quote currency expressed in terms of its base currency. The quote currency’s value depends on the exchange rate of the base currency.
What is the value of a base currency?
The value of the base currency is always 1. The quote currency (also known as counter currency) is the second one in a currency pair. It helps assess the value of the base currency. Currency quotes tell you how much of the quote currency is needed to exchange for one unit of the base currency. What is an example of a base currency?
