Base Currency
Trading BasicsThe first currency listed in a currency pair. In EUR/USD, the euro (EUR) is the base currency. One unit of the base currency is priced in terms of the quote currency.
What Is the Base Currency?
The base currency is the first currency in a Currency Pair. In EUR/USD, EUR is the base currency. In USD/JPY, USD is the base. The Exchange Rate tells you how much of the Quote Currency you need to buy one unit of the base currency.
Base Currency in Trading
When you "Buy" a currency pair, you are buying the base currency and selling the quote currency. When you "Sell" the pair, you are selling the base currency. A Lot is always denominated in units of the base currency: one standard lot of EUR/USD is 100,000 euros, while one standard lot of USD/JPY is 100,000 US dollars.
Base Currency and Pip Value
The base currency affects how Pip values are calculated. When the quote currency is USD (EUR/USD, GBP/USD), pip values are straightforward: $10 per pip for a standard lot. When USD is the base currency (USD/JPY, USD/CHF), the pip value changes with the exchange rate. Use our Pip Value Calculator to get accurate values.
Related Terms
Quote Currency
The second currency in a currency pair. In EUR/USD, the US dollar (USD) is the quote currency. It shows the price of one unit of the base currency.
Currency Pair
Two currencies quoted together showing how much of one currency is needed to buy one unit of the other. EUR/USD = 1.0850 means 1 euro costs 1.0850 US dollars.
Exchange Rate
The price of one currency expressed in terms of another currency. EUR/USD at 1.0850 means 1 euro equals 1.0850 US dollars.