Currencies in forex trading are always quoted in pairs, because one currency must be exchanged for another.

Example:

• EUR/USD = 1.1000

This quote means that 1 Euro is worth 1.10 US Dollars.

Each currency pair reflects the relative value between two currencies. Price movements show how the value of one currency changes compared to the other.

Types of Currency Pairs

Major Pairs

These pairs include the US Dollar and are the most actively traded. They typically have high liquidity and tighter spreads.

Examples: EUR/USD, GBP/USD, USD/JPY

Minor Pairs

Minor pairs do not include the US Dollar but involve major global currencies.

Examples: EUR/GBP, GBP/JPY

Exotic Pairs

These pairs include one major currency and one currency from an emerging or smaller economy. They often have wider spreads and lower liquidity.

Examples: USD/THB, EUR/TRY

Understanding the type of pair being traded helps traders manage expectations regarding volatility and trading costs.