Definition: A currency pair in forex trading is a quotation of two different currencies, with the value of one currency being quoted against the other. The first currency in the pair is the base currency, and the second currency is the quote (or counter) currency. The currency pair shows how much of the quote currency is needed to purchase one unit of the base currency.
Examples of common currency pairs include EUR/USD (Euro/US Dollar), GBP/USD (British Pound/US Dollar), and USD/JPY (US Dollar/Japanese Yen). Understanding how to trade and analyze currency pairs is essential for success in the forex market.
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