Currencies are always quoted in pairs. The reason for this is because in every Forex transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:
The first listed currency to the left (GBP – the particular British pound, in this example) is called the base currency whereas the next one is referred to as the quote or perhaps counter currency (USD – the particular U. S. dollar).
While you are buying, the exchange rate notifys you how much you should pay in units with the quote currency to buy one unit with the base currency. In the example above, you should pay 1. 51258 U. S. dollars to buy 1 British pound.
When you are selling, the exchange rate notifys you how many units with the quote currency you obtain for selling one unit with the base currency. In the example above, you might receive 1. 51258 U. S. dollars if you sell 1 English pound.
The base currency will be the basis for the particular buy or the particular sell. If you purchase GBP/USD this simply means that you're buying the basic currency and together selling the offer currency. In any nutshell: you purchase EUR, you promote USD. You should buy the pair should you believe the basic currency (GBP) may appreciate (gain value) relative to the quote foreign currency (USD).
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