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Module 1 – Lesson 8 – Financial Instruments

JPY: Japan Yen

GBP: Great Britain pound

CHF: Swiss Franc

CAD: Canadian Dollar

AUD: Australian Dollar

NZD: New Zealand Dollar

Unlike the other markets, where the absolute values of singular assets, companies or index are shown, in the
Forex market the representation of the currency value is made in a combined form.

In Forex the value of a currency will never be expressed in absolute terms, but always in relation to another.
The exchange rate describes the price for which the currency of a country can be exchanged for another
country's currency.

For example, the most commonly-traded currency pair consists of the euro and the U.S. dollar. It is always
listed as EUR/USD and never the reverse order.

How Forex brokers typically display Forex rates

6. anatomy of a currency pair
The first currency listed in the currency pair is called the base currency; the second currency is referred to as
the quote, or sometimes counter currency.

When published with an exchange rate, the currency pair indicates how much of the quote currency is
required to purchase one unit of the base currency. For example, EUR / USD = 1.5467 indicates that one euro
can buy 1.5467 US dollars.

When selling a currency pair, the exchange rate shows how many units of the quote currency you will receive
when selling one unit of the base currency.

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