Every forex pair has two halves, and they are not interchangeable. The one on the left is the base currency; the one on the right is the quote currency. Get them the wrong way round and the price stops making sense. Once you have it straight, reading any quote takes a second.
Which is which
In EUR/USD, the euro is the base and the US dollar is the quote. The base is always the first currency named, and it is the one you are buying or selling. The quote is the second, and it is the currency the price is expressed in. Think of it as a shop price: the base is the item, the quote is the money.
Why the order is fixed
You rarely get to choose which currency comes first — the market follows a set convention. There is a rough priority order (EUR, then GBP, AUD, NZD, USD, CAD, CHF, JPY), and the higher-ranked currency becomes the base. That is why you see EUR/USD, not USD/EUR, and GBP/JPY, not JPY/GBP. It keeps quotes consistent across brokers, so the same pair reads the same way everywhere. When in doubt, the first currency named is the base — every time.
What the price means
The number is how many units of the quote currency one unit of the base costs. EUR/USD at 1.0850 means €1 costs $1.0850. GBP/USD at 1.2700 means £1 costs $1.27. USD/JPY at 150.00 means $1 costs ¥150. The base is fixed at one unit; the price moves because the amount of quote currency needed to buy it changes.
Buy the pair and you expect the base to strengthen against the quote. Sell it and you expect the base to weaken. A rising EUR/USD means the euro is gaining on the dollar; a falling one means the opposite.
A worked example
EUR/GBP is quoted at 0.8500, so €1 costs £0.85. You buy €10,000 and pay £8,500. The euro strengthens and the pair rises to 0.8600 — now €1 costs £0.86, and your €10,000 is worth £8,600. You close for a £100 gain. Had it fallen to 0.8400 instead, your €10,000 would sell back for £8,400, a £100 loss. The base amount never changed; the price simply told you what it was worth in pounds.
Why it matters
The order matters for reading your own account. Profit and loss on a pair is paid in the quote currency, so GBP/USD settles in dollars and EUR/GBP settles in pounds. If your account is in pounds, a winning USD-quoted trade still has to be converted back, and the exchange rate at the time shifts the final figure slightly. Knowing which currency the price is denominated in tells you where that conversion happens.
Shortcut: read the pair left to right as "one [base] is worth this many [quote]." One euro is worth 1.0850 dollars. That single sentence unlocks every quote on the platform.
The Karnek note
Karnek reports every trade in the account's own currency, read straight from your live terminal, so the profit and loss you see already reflects how each pair settled. It is read-only and can never open or close a position.
More in The Basics of Trading →
Written and reviewed by the Karnek Research team. Last updated August 2026.
Educational content only - not financial advice. Past performance does not predict future results. Trading carries significant risk.