How Currency Pairs Work in Forex
Understanding how currency pairs work lays the groundwork for currency or forex trading through retail brokers. Currencies are always expressed in pairs, one currency value vis-a-vis another. No single currency pair can trade independently from the others, they are all interconnected. You always buy one currency and sell another while making a forex transaction. The beginners can try a forex demo account for trading in any currency and depending on the currency rates and market fluctuations you can post profits. For instance, when you buy USD-EUR, you pay a Euro to buy USD. If the US dollar rises vis-a-vis the Euro then you sell Euro to buy USD and make a profit. The first currency of any given currency pair is called the base currency and the latter is called the quote currency. The US dollar is the primary currency and is at the centre of all transactions in the currency market. All currency pairs are dependent on it directly or indirectly. Thus, the health of the US econo...