Glossary Term

Currency Pair

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Currencies are traded in pairs. To trade a currency basically means to sell one currency for another. Traders who do so are expecting the currency they’re buying to rise relative to the currencies that they’re selling. Currency pairs are just a simple way to express this relation. So, for example, The euro/British pound currency pair is expressed as follows: EUR/GBP. If this particular pair has an exchange rate of 0.92, this means that one euro can currently buy 0.92 GBP. Traders expecting this number to go up will want to buy this pair, while traders who expect it to drop will want to sell this pair.

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