Definition
Quote CurrencyThe quote currency is the second currency in a forex pair. Prices, pip values and profit or loss on that pair are all expressed in it.
Example
In USD/CAD quoted at 1.3700, CAD is the quote currency, so a 1-pip move on a standard lot is worth 10 Canadian dollars before conversion.
In detail
The quote currency (also called the counter currency) sits on the right side of a pair such as EUR/USD or USD/JPY. The exchange rate tells you how many units of the quote currency one unit of the base currency costs.
Because the price is denominated in the quote currency, your raw profit or loss on a trade is too. A trader with a US dollar account who trades EUR/GBP earns or loses British pounds first; the platform then converts that amount into dollars.
Why it matters
The quote currency determines the value of a pip. For any pair:
Pip value in quote currency = pip size × units traded
So on a standard lot (100,000 units), one pip of 0.0001 is worth 10 units of the quote currency, and one pip of 0.01 on a JPY-quoted pair is worth 1,000 yen.
That is why pip values on USD-quoted pairs such as EUR/USD and GBP/USD are a steady $10 per standard lot for a dollar account, while pip values on pairs like USD/CHF or USD/JPY change as the exchange rate moves.
Example
Assume USD/JPY is quoted at 150.00 (illustrative) and you trade one standard lot.
- Pip value in yen: 0.01 × 100,000 = 1,000 JPY
- Pip value in dollars: 1,000 ÷ 150.00 = about $6.67
If USD/JPY were at 140.00 instead, the same pip would be worth 1,000 ÷ 140.00 = about $7.14. The trade size has not changed, but the dollar value of each pip has.
Quick tip
When you check a pair's pip value, look at the quote currency first. If it matches your account currency, the calculation is simple. If not, use the Pip Calculator to convert it accurately.
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Related terms
- Base CurrencyThe base currency is the first currency in a forex pair. The quote shows how much of the second currency is needed to buy one unit of it.
- Currency PairA currency pair is the quotation of one currency against another, such as EUR/USD, showing how much of the second currency buys one unit of the first.
- PipA pip is the standard unit for measuring how much a currency pair's price changes: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen.
- Ask PriceThe ask price is the price at which a broker or market maker will sell a currency pair to you, so it is the price you pay when you open a buy trade.