Currency Pairs

Read the units before the number

The first currency is the base; the second is the quote. EUR/USD expresses dollars per euro, while USD/JPY expresses yen per dollar. The CME Group guide to FX quote conventions explains this ordering and why conventions for a futures instrument can differ from familiar spot quotations.

The table below describes quotation units, not current prices. Always check the specification of the instrument you are reading: a pair name does not establish its contract size, settlement method or financing terms.

Pair	Base currency	Quote currency	Read it as
EUR/USD	Euro	US dollar	US dollars per euro
GBP/USD	Pound sterling	US dollar	US dollars per pound
USD/JPY	US dollar	Japanese yen	Yen per US dollar
EUR/GBP	Euro	Pound sterling	Pounds per euro

An example in both directions

At a hypothetical EUR/USD rate of 1.1000, 100 euros translates to 110 dollars before costs. The inverse is one divided by 1.1000, or approximately 0.9091 euros per dollar. Keep the unrounded value through intermediate calculations and round the final amount appropriately.

When EUR/USD increases, one euro buys more dollars. When USD/JPY increases, one dollar buys more yen. “The pair rose” refers to the base currency's price in quote-currency units. It does not mean both currencies strengthened against everything else.

A price needs context

A complete quote description includes the source, timestamp, bid or ask side, available amount and whether the value is indicative, historical or executable. A reference rate is useful for analysis, but it should not be silently substituted for a rate offered for a transaction. The conversion-cost guide connects quotation to delivered proceeds.

Spot notation and pips

In common spot notation, many non-yen pairs use a 0.0001 pip increment, while many yen pairs use 0.01. Platforms can display fractional increments, and the actual product specification takes priority. A pip is a price increment, not a fixed amount of profit or loss. Size, direction and account currency also matter.

Connect two rates through a common currency

For a purely illustrative cross-rate, 1.1000 dollars per euro multiplied by 150.00 yen per dollar gives 165.00 yen per euro. The dollar units cancel. This theoretical relationship assumes compatible inputs and excludes costs, timing differences and constraints on access.

The same unit check works when one leg is a dollar stablecoin. Continue to FX Dollar Stablecoin Rates to see when to multiply, when to divide and how a token-dollar deviation changes the result.

Go from notation to a research question

Read the complete base-and-quote guide below, then apply the method to one pair in your own notes. Identify the currency that matters for your expenses or research, and write its units explicitly. An exchange-rate explanation becomes much easier to test when the price relationship is unambiguous.