Base Vs Counter Currency

Base Currency

A rate is officially quoted on the foreign exchange market by naming two currencies. The first currency is the base currency. Currencies are always tradable only in pairs, because the trader must always use one currency to acquire the other. The exchange rate therefore expresses the value of the base currency. It is defined by the first three letters of a quote.

Counter Currency

This is the second currency abbreviation after the base currency (letters four to six). It forms the second part of the currency pair. It indicates the amount of the counter currency that must be spent to acquire one unit of the base currency.