Understanding Forex Currency
In the forex market, currencies are traded in pairs. For instance Euro/US dollar (EUR/USD) or US dollar/Japanese Yen (USD/JPY). A currency pair signifies the exchange rate between the two currencies. The first currency in a currency pair is at all times leading and iscalled the base currency. The base currency is the currency that stays steady when determining a currency pair�s price. The second currency in a currency pair notation is called the counter currency or pricing currency. For instance, a transaction of purchasing the EUR/USD at 1.3000 is in fact purchasing the Euro and selling the Dollar at 1.3000 cent. If the Euro rises in value in relation to the dollar, the price will rise and the currency trader will make money on his or her trade.
Foreign currencies such as equities have their personal symbols that differentiate one from another. Given that foreign currencies are quoted in terms of the worth of one currency next to the worth of another, a currency pair involves the �name� for both currencies, divided by a �/�. The �name� is a three-letter acronym. The initial two letters are in almost all cases kept for classification of the country. The last letter is the initial letter of the unit of the currency for that country. Examples are: USD is the symbol for the US currency, which is the United States Dollar. The nickname the USD is Buck. GBP is the symbol for Great Britain Pound which has the nickname of Cable. JPY is the symbol for Japanese Yen, which has the nickname of Yen. CHF is the symbol of Franc, which has the nickname of Swissy. CAD is for Canadian Dollar, with Loonie as is its nickname. NZD is for New Zealand Dollar, with Kiwi as its nickname. AUD is the symbol for Australian Dollar and Aussie is its nickname. EUR is for Euro, with Fiber as its nickname.
