Foreign Exchange
Most people interested in trading have heard of forex trading, this is the swapping of one currency for another. Businesses, governments, brokers and everyone in between all interact together to make this the world’s largest asset class, about £5.3tn worth of transactions take place every day. Forex trading is OTC, which stands for Over the Counter (as opposed to exchange traded which is what happens with most shares).
FX prices are always quoted as a pair, i.e. EUR/USD, EURUSD or EUR-USD. The first currency is the base currency, the second the quote currency. The price is always displayed as the amount of the second currency you can get for the first. You are being quoted a price for 1 unit of the base currency. Lets have a look at a few more live prices on some popular currency pairs:
- Foreign Exchange is the world’s biggest asset class and it where currencies are exchanged
- Foreign Exchange is also known as FX or Forex
- Forex prices are always quoted in pairs
- The first currency in a pair is called the base currency, the second the quote currency
