What Is Base Currency? Meaning & Example
Definition
The base currency is the first currency in a forex pair, and its value is expressed in units of the second. Buying a pair means buying the base currency.
Related terms
The quote currency is the second currency in a forex pair and shows how much of it is needed to buy one unit of the base. Profits and losses are often measured in the quote currency.
Forex PairA forex pair quotes the value of one currency in terms of another. The first currency is the base and the second is the quote currency.
Exchange RateAn exchange rate is the price of one currency in terms of another. Rates change constantly based on trade, interest rates, inflation and sentiment.
What is Base Currency?
The base currency is the first currency in a forex pair, and its value is expressed in units of the second. Buying a pair means buying the base currency.
Can you give an example of Base Currency?
In GBP/USD, the British pound is the base currency.