Forex Quotes
How to Read a Forex Quote?
A Forex quote is always a two-sided quote with a ‘bid’ and ‘offer’. The ‘bid’ is the price at which you can sell the base currency (i.e. buy the second currency). The ‘offer’ is the price at which you can buy the base currency (i.e. sell the second currency). As mentioned before, the first currency listed is the base currency. In the major currency pairs the US dollar is traditionally treated as the base currency this includes USD/JPY, USD/CHF and USD/CAD. In this case $1 USD (the base currency) is quoted in terms of the second currency. For example, a quote of USD/JPY = 112.25 means that one US dollar is equal to 112.25 Japanese Yen.
A Forex quote is always a two-sided quote with a ‘bid’ and ‘offer’. The ‘bid’ is the price at which you can sell the base currency (i.e. buy the second currency). The ‘offer’ is the price at which you can buy the base currency (i.e. sell the second currency). As mentioned before, the first currency listed is the base currency. In the major currency pairs the US dollar is traditionally treated as the base currency this includes USD/JPY, USD/CHF and USD/CAD. In this case $1 USD (the base currency) is quoted in terms of the second currency. For example, a quote of USD/JPY = 112.25 means that one US dollar is equal to 112.25 Japanese Yen.
What to remember:
- The first currency listed is the base currency
- The value of the base currency is always 1
When USD is the base currency and the quote goes up, that means USD has strengthened in
value and the other currency has weakened. Rising quotes mean a US dollar can now buy more of
the other currency than before.
Currency-pair quote of USD/CAD 1.2000/05 means there is a $1.2000 CAD bid price and a $1.2005
CAD ask price for the U.S. dollar-Canadian dollar currency pair. In other words, you can obtain
$1.20 Canadian for every $1 USD (bid price), or, alternatively, you have to pay $1.2005 Canadian
for every $1 USD.
