Base and quote
A pair has two halves. In GBPUSD the first currency, the pound, is the base; the second, the dollar, is the quote. The price is how much quote currency one unit of base is worth. At 1.2650, one pound costs 1.2650 dollars.
When you buy a pair you are buying the base and selling the quote. When you sell, the reverse. So "buy GBPUSD" is a bet that the pound will strengthen against the dollar.
Majors, minors and exotics
| Group | Examples | What to expect |
|---|---|---|
| Majors | EURUSD, GBPUSD, USDJPY, USDCHF | Deepest liquidity, tightest spreads |
| Minors (crosses) | EURGBP, EURJPY, GBPJPY | No US dollar; spreads a little wider |
| Exotics | USDTRY, USDZAR, EURSEK | Thin liquidity, wide spreads, sharp moves |
Nicknames you will hear
- Cable —
GBPUSD, from the transatlantic telegraph cable that once carried its price. - Fibre —
EURUSD. - Loonie —
USDCAD, after the bird on the Canadian dollar coin. - Aussie and Kiwi —
AUDUSDandNZDUSD.
Summary
The first currency in a pair is what you are buying or selling; the second is what you pay with. Majors are the safest place to learn.