What is the difference between base currency and quote currency?

Base currency and quote currency are two common expressions in the Forex (foreign exchange) market. So-called currency pairs are traded on this market. Base currency (also called transaction currency) is always given first in a currency pair; quote currency (also called counter currency) is given second.

What is a base currency in forex?

In forex, the base currency represents how much of the quote currency is needed for you to get one unit of the base currency. For example, if you were looking at the CAD/USD currency pair, the Canadian dollar would be the base currency and the U.S. dollar would be the quote currency.

What is a direct base currency?

For convenience, the direct base currency is always taken as one unit. In the example above, the Chinese exporter will estimate the value of 1 CNY in terms of UYU. This is a direct quote, where the domestic money is the base, and the foreign money is the counter.

What is the difference between a direct currency and a counter currency?

In foreign exchange (forex), the quote currency, commonly known as the counter currency, is the second currency in both a direct and indirect currency pair and is used to determine the value of the base currency. In a direct quote, the quote currency is the foreign currency, while in an indirect quote, the quote currency is the domestic currency.