Page 8 - NOT FOR SELL SIBUSISIWEFXupdate_Neat

CURRENCY PAIRS

What is the Significance of Currency Pairs?

A currency pair represents the exchange rate between two currencies. For example, the rate at
which the EUR/USD is trading represents the number of US Dollars one Euro can purchase.

The first currency listed is always the base currency.

When to BUY a pair

If, for example, a trader believed that the Bank of Japan was likely to intervene to cause a decrease
in the Yen against the US Dollar, then the trader would BUY USD/JPY (Ask the US Dollar/Bid the Yen)
expecting that the price of the USD/JPY would rise.

When to SELL a Pair

If a trader believed, for example, that Japanese investors were losing faith in the United States
economy and were pulling money out of the US into Japan, then the trader would Sell USD/JPY (Bid
the US Dollar/Ask the Yen) expecting that the price of USD/JPY would fall.

Below is an example of how currency pairs are listed on the trading platform. The currency pairs are
listed on the left side of the screen. The Bid price is the level at which a trader Bids the currency pair
and the Ask price is the level at which a trader Asks the currency pair.