What are Currency pairs?

A currency pair is a quotation of the relative value of one currency unit against another currency unit in the foreign exchange market (Forex). It represents the exchange rate between two currencies and is used to facilitate currency trading. Currencies are always traded in pairs when we trade in Forex.  The first currency of the pair is known as the base currency. The second currency is known as the quote currency.

For Example: In the GBP/USD currency pair the GBP (Great Britain Pound) is the base currency and USD(US Dollar) is the Quote Currency

The exchange rate indicates how much of the quoted currency is required to buy one unit of the base currency.  They provide opportunities for buying or selling one currency in exchange for another with the expectation of profiting from changes in their relative values.

For Example, If the exchange rate of GBP/USD is 1.2736, it means that 1 pound (GBP) can be exchanged for 1.2736 US dollars (USD).