Currency are always quoted as follows:
EUR/USD = 1.2845
EUR in this case is called the Base Currency
USD is called the Counter Currency
USD is called the Counter Currency
So,
EUR/USD = 1.2845 means 1Euro(€) is equivalent to 1.2845 US Dollars ($)
Similarly,
USD/CHF = 1.1054 means 1 US Dollar($) is equivalent to 1.1054 to Swiss Franks
USD/JPY = 108.34 means 1 US Dollar($) is equivalent to 108.34 Yen(¥)
USD/JPY = 108.34 means 1 US Dollar($) is equivalent to 108.34 Yen(¥)
Notice that I am quoting the prices with 4 decimal places. There are many brokers that quote their price in 5 digits format – and this really confuse me. I always ignore the last decimal point. 5 Decimal point price shows up like this.
EUR/USD = 1.28452
Notice also that the Yen is quoted with 2 or 3 decimal places like 86.36 for USD/JPY pair. It is the only currency with 2 or 3 points.
