A currency pair is a financial asset made up of two currencies that is listed on the currency market or forex market .
A currency pair, as its name suggests (pair) is made up of two currencies. In financial jargon the term “crossover” is also used. A currency pair and a crossover is exactly the same. For example:
The EUR / USD currency pair or the EUR / USD cross. It is also common to simply say “even.” For example, the EUR / USD pair.
The concept of currency pair is an essential concept in finance . Its importance lies in its official price. The official price of one currency against another can be found in the currency market.
How to read a currency pair
When a person is just starting, not surprisingly, they may not know very well how to read or write a currency cross. First of all, it is important to know that each currency has a symbol. For example, the euro is EUR, the US dollar is USD, or the Japanese yen is JPY. Below is a table with the symbols of the most important currencies:
|New Zealand Dollar||NZD|
|Hong Kong dollar||HKD|
|The Norwegian crown||NOK|
|South korean won||KRW|
|South African Rand||CZAR|
Once we know the symbols of each currency, we are ready to learn how to read a currency cross. To do this, we will give an example with the EUR / USD pair.
A pair consists of two currencies. One currency, the first, which is called the base currency. And, another currency, the second, which is known as a quoted currency. In the forex market, it is usually separated by a bar. The way of reading it is sequential. That is, first things first and second things second. The EUR / USD pair reads the euro-dollar pair. Despite the script that comes out halfway, everything is read together. The base currency is read first and then the quote currency. Below is the USD / JPY cross:
This cross is read Japanese dollar-yen.
Interpretation of a currency pair
Now that we know how to read a currency cross, let’s see how it is interpreted. That is, if we see that the EUR / USD is trading at 1.10 or the USD / JPY is trading at 130, what does that mean? Well, the number at which it trades tells us how much of the quoted currency is exchanged for each unit of the base currency. For example:
The EUR / USD is trading at 1.10, it means that $ 1.10 (USD) is exchanged for one euro (EUR). Seen from another perspective, we could say that for every euro (EUR) they give us $ 1.10.
Let’s see another example with the USD / JPY pair. If this pair is trading at 130, it means 130 yen (JPY) is exchanged for one dollar (USD). Or, that for every dollar they would give us 130 yen (JPY).
How to know the price of a currency crossing
Finally, to know how much they would give us of one currency for a certain amount of another, you can access our currency converter through the following link:
Once you access the link, you will have the explanation of how to use it. In addition, you also have extra information about exchange rates, the usefulness of a currency converter, as well as links to articles that may be of interest to you.