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Market Basics

What Is a Currency Pair

A currency pair is one currency priced in another. This paper shows you how to read the two sides of any pair, what a rising number means with the dollar on either side, what one real trade is in pair terms — euros bought with dollars and worth more dollars at the close — what a pair with no dollar in it is, and how every line in your platform's list reads the same way.

Difficulty
Intermediate
Reading time
6 min
Pages
8
Reviewed by
Saman Rahbar

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One currency, weighed in another

A currency pair is one currency priced in another. EUR/USD at 1.15872 means one euro costs 1.15872 US dollars. The currency on the left is the thing being priced, and the price is always for exactly one of it. The currency on the right is the money the price is written in. Every pair on your platform reads the same way: the left one is the thing, the right one is the money, and the number is how much of the money one unit of the thing costs.

Which side the dollar is on

The dollar sits on the right of some pairs and on the left of others, and that decides what a rising number means. On EUR/USD the dollar is the money, so a rising number means the euro got dearer and the dollar weaker. On USD/JPY the dollar is the thing being priced, so a rising number means the dollar got dearer and the yen weaker. The same currency on the opposite side has the opposite meaning, and the pair's name tells you which side it is on.

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