Exchange Rate - Links

An exchange rate is the price of a country's currency in terms of another country's currency. When trading on a currency market like FOREX, there are a few basic rules to understand. When reading an exchange rate, the first currency listed first is the base currency and the value of the base currency is always 1.

The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 120.01 means that one U.S. dollar is equal to 120.01 Japanese yen.