Definition: An indirect quote in forex trading is a way of expressing the exchange rate between two currencies from the perspective of a foreign currency relative to the domestic currency. It indicates how many units of the foreign currency are required to buy one unit of the domestic currency. In other words, it shows the value of the domestic currency in terms of the foreign currency.
Examples:
- If you are in the United States (USD) and looking at the exchange rate with the euro (EUR), an indirect quote would be expressed as EUR/USD. For example, if the EUR/USD rate is 0.85, it means 0.85 euros are needed to buy one US dollar.
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