Price Quote | Understanding of Forex Currency Quotes.
The price quote always consists of two currencies.
The value of one reflects through the benefit of another.
The first currency listed on the left is the base currency, while the money on the right is called the quote currency.
The USD / JPY is 105; it means it takes 105 yen the quote currency to buy a $1 the base currency.
If EUR / USD is 1.3500, it means it takes 1.3500 five dollars to buy one euro, the value of the base currency is always one.
And if the number goes up, it means that the base currency has strengthened and the quote currency has weakened.
USD / JPY goes from 105 to 106. It means that the dollar has strengthened, and the yen has weakened.
Similarly, the price goes down. It means that the base currency has weakened, and the quote currency JPY has strengthened.
And EUR / USD goes from 1.3500 to 1.3400. It means that the EUR has weakened, and the dollar has strengthened.
There are two prices; these are the bid and the offer.
The bid is the number on the left, and the offer is the price on the right.
A bid is a price at which you can sell the base currency, and the offer the ask is the
the rate at which you can buy the base currency.
There are two types of currency price quotes.
Standard Price Quotes are 4 or 5 decimals places.
GBP/USD = 1.2650 4 decimals = 1.26502 5 decimals places.
Yen Price Quotes 2 or 3 decimals places.
USD/JPY = 105.52 2 decimals places = 105.523 3 decimals places.
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