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Glossary · Forex

Quote currency

The second currency in a pair; the price of the pair is expressed in units of it.

By Sky Trade editorial teamUpdated

In EUR/USD the quote currency (also called the counter currency) is the US dollar: the price says how many dollars one euro costs. Profit and loss on conventional forex positions are naturally calculated in the quote currency.

The quote currency moves the pair as much as the base does. If US inflation surprises to the upside and the dollar strengthens, EUR/USD tends to fall even if nothing at all happened in Europe. Watching the economic calendar for both currencies of a pair is therefore part of basic preparation.

The pip is also defined in the quote currency. For pairs quoted in yen (USD/JPY, EUR/JPY) prices have two decimals and a pip is 0.01; for most other pairs it is 0.0001.

In fixed-payout trades you are not paid by the pip, so the size of the move in the quote currency doesn't change your result — only the direction at expiry does. It still pays to understand which side of the pair is pushing the price. See base currency and what moves currency prices.

Example

EUR/JPY at 163.40 means €1 costs ¥163.40. A move to 163.55 is 15 pips, measured in yen at 0.01 per pip.

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