A currency pair is the quotation of two currencies. The first currency in the pair is the base currency, and the second is the quote currency. For example, in EUR/USD, the euro (EUR) is the base, and the US dollar (USD) is the quote.
Currency pairs are classified into three categories:
Currency pairs are classified into three categories:
- Major Pairs: Include the USD and other major currencies like EUR, GBP, and JPY. Examples: EUR/USD, GBP/USD.
- Minor Pairs: Exclude the USD but involve major currencies. Examples: EUR/GBP, AUD/JPY.
- Exotic Pairs: Combine a major currency with a currency from a developing economy. Examples: USD/TRY, EUR/ZAR.