Base Currency
In forex trading, the base currency represents the amount of the quote currency that is required to get one unit of the base currency.
For example, if you were to look at the CAD / USD currency pair, the Canadian dollar would be the base currency and the US dollar would be the quote currency.
The abbreviations for currencies are prescribed by the International Organization for Standardization (ISO). These codes are provided in ISO 4217.1.
Currency pairs use these three letter codes to represent a specific currency. The currencies that make up a currency pair are sometimes separated by a slash. The slash can be omitted or replaced with a period, a hyphen, or nothing. The main currency codes include USD for the US dollar, EUR for the euro, JPY for the Japanese yen, GBP for the British pound, AUD for the Australian dollar, CAD for the Canadian dollar and CHF for the Swiss franc.
In forex currency pairs are written as XXX / YYY or simply XXXYYY. Here XXX is the base currency and YYY is the quote currency. Examples of these formats are GBP / AUD, EUR / USD, USD / JPY, GBPJPY, EURNZD, and EURCHF.
When specifying an exchange rate, currency pairs indicate how much of the quote currency is needed to buy one unit of the specified base currency. For example, if you read EUR / USD = 1.55, it means that _1 equals 1.55 USD. It states that the buyer must pay $ 1.55 to buy _1.
The rate of the currency pair is read in the same way when selling the base currency. If a seller wants to sell _1, they get $ 1.55 for it.