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How to Read Forex Quotes |
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You can learn to read Forex quotes with relative ease. Learning how to read foreign exchanges is based on a few key points that can be quickly mastered.
The United States dollar serves as the "base" currency and is the foundation point of the Forex market. Currencies such as USD/JPY, USD/CAD, and USD/CHF, along with several others, are called the "majors". These are noted by the second currency listed in one of the above pairs and are shown as a unit of $1 USD.
USD/JPY 113.01 tells you that one U.S. dollar is equal to 113.01 Japanese yen. As the dollar gains in value, this "base unit's" quote rises, and it means the other currency it is listed with has weakened. If this quote goes up to 115.01 for example, then the base unit or dollar has become stronger and will buy more yen than it could have previously.
Three exceptions exist to this and they are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). For any of these, the quote would be shown as GBP/USD 1.5544, meaning that one British pound equals 1.5544 U.S. dollars. Obviously in this example, the USD is not the base unit, so when the numbers go up, the USD is getting weaker and it would then take more USD's to equal any of these three currencies.
Cross currencies are currency pairs based on the same idea with no USD involvement. This could be something like AUD/JPY 155.72 and this means one AUD equals 55.72 yen.
PIP means "percentage in point", and in Forex, it is the fourth decimal point. So, a 5 pip spread on the EUR/USD will look like this 1.1500/1.1505. The Japanese yen is an exception here, because in USD/JPY, it is taken out just two decimal points for 1/100th of a yen rather than 1/1000th as with others. In USD/JPY, a 3 pip spread would look like this 110.04/110.07.
A two-sided Forex quote is called a "bid and ask". The price at which you could sell the base currency while buying the counter currency is the "bid" price. The "ask" price is the amount at which you can purchase the base currency while selling the counter currency.
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| Symbol |
Rate |
| GBP:CHF |
2.007608 |
| GBP:JPY |
182.222212 |
| GBP:USD |
1.757198 |
| NZD:USD |
0.658397 |
| EUR:CAD |
1.503413 |
| EUR:CHF |
1.557680 |
| EUR:GBP |
0.775889 |
| EUR:JPY |
141.384148 |
| EUR:USD |
1.363390 |
| AUD:JPY |
80.415028 |
| AUD:USD |
0.775455 |
| USD:CAD |
1.102702 |
| USD:CHF |
1.142505 |
| USD:JPY |
103.700427 |
| USD:SEK |
7.185028 |
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