What Is Base and Quote Currency?
What is base and quote currency? The base is the first currency in a pair and the quote the second: in EUR/USD the euro is the base and the US dollar the quote. A price of 1.1000 means one euro costs 1.10 dollars.
Read every quote that way: one unit of the first currency, priced in the second. USD/JPY at 150.00 says one dollar costs 150 yen. Those prices are examples; the last price of each major is on Major forex pairs: prices and fundamentals.
The chart is the price of the base
When EUR/USD rises, the euro is gaining on the dollar. When USD/JPY falls, the dollar is losing ground to the yen, which means the yen is the one going up.
That second case catches a lot of newcomers. A headline says the yen is stronger and the USD/JPY chart points down. Both describe the same move. Before you read any chart, say to yourself which currency is in front.
Where the dollar sits
The three-letter codes, USD, EUR, JPY and the rest, are ISO 4217 codes, maintained by SIX for the standard (SIX currency codes). In April 2025 the dollar was on one side of 89.2% of all trades (BIS Triennial Survey), so nearly every pair you look at has the dollar in it.
It does not always sit in the same place. In EUR/USD and GBP/USD the dollar is the quote. In USD/JPY and USD/CHF it is the base. That one detail decides which button you press.
Buying a pair is two trades at once
Buying EUR/USD means buying euros and selling dollars in the same moment. Selling it does the reverse. You cannot take a view on one currency here without holding it against another.
So “I think the dollar will weaken” is not a trade yet. Against the euro you would buy EUR/USD, because the dollar is the quote and you are selling it. Against the yen you would sell USD/JPY, because the dollar is the base. Same view, opposite buttons.
The other currency matters as much as the dollar. If the dollar falls and the euro falls just as much, EUR/USD hardly moves. Why every pair weighs two economies against each other is in Currency Pairs and Relative Pricing.
Your result is counted in the quote currency
A pip on EUR/USD is 0.0001. On a standard lot of 100,000 euros, one pip is 100,000 × 0.0001 = 10 dollars. A 50-pip move is 500 dollars, up or down, before your broker converts it into your account currency.
USD/JPY uses different units but the same logic. A pip there is 0.01, so on 100,000 dollars one pip is 1,000 yen. If your account is in euros or pounds, that yen amount is converted at the going rate, so the same 50 pips can be worth a little more or less from one week to the next.
The swap follows the same order
Hold a position overnight and your broker credits or charges swap. Long a pair, you earn the base currency’s interest rate and pay the quote’s. Short, it is the other way round, and either way the broker keeps a markup.
The gap between those two rates, and how to work it out, is in What Is an Interest Rate Differential? Today’s gap for every major pair is on Interest rate differential by currency pair, and the gap after inflation on Real interest rates by currency.