Reading a pair
In EUR/USD = 1.0850, EUR is the base currency and USD is the quote currency. One euro costs 1.0850 US dollars.
Buying EUR/USD means buying euros and selling dollars at the same time. You profit if the euro strengthens against the dollar.
Majors, minors and exotics
- Majors include the US dollar and another major currency (EUR/USD, GBP/USD, USD/JPY).
- Minors (crosses) pair two major currencies without the dollar (EUR/GBP).
- Exotics pair a major currency with an emerging-market currency (USD/ZAR). They usually have wider spreads.