Currency Pair
Two currencies quoted against each other, showing how much of one buys the other.
Also called: fx pair · pair
In plain language
A pair like EUR/USD quotes the euro in terms of dollars. Buying the pair means buying euros and simultaneously selling dollars.
Every forex trade is therefore two positions at once. You are always long one currency and short another.
This is why forex has no true "short". Selling EUR/USD is simply buying USD/EUR, which is one reason there are no borrow costs.
Why it matters
Because each trade involves two currencies, positions across different pairs can be far more correlated than they look — several trades can be the same dollar bet in disguise.
Common mistakes
- Holding several pairs that share a currency and treating them as independent risks.
- Forgetting that news on the quote currency moves the pair just as much as news on the base.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
The first currency in a pair — the one being bought or sold.
The second currency in a pair — the one the price is expressed in.
The most heavily traded currency pairs, all involving the US dollar.
The hidden risk of holding several positions that tend to move together.
The standard smallest price increment in a currency pair — usually 0.0001.