Have You Seen EUR/USD as USD/EUR?

Have You Seen EUR/USD as USD/EUR?

One thing about currency pair that we all know is that the first currency mentioned in the pair is called Base currency, while the second currency is called the Quote currency.

Now, sometimes the question strikes while going through these currency pairs - why isn't the EUR/USD is written as USD/EUR?

Well, until now all of the readers might have understood the theme of today's article, am I right?

The currency pairs have two categories - direct and indirect. The direct mode of displaying currency pair includes domestic currency, as the base currency whereas foreign currency as the quote currency.

In an indirect mode of currency pair representation, the foreign currency represents the base currency and the domestic currency represents the quote currency.

For example, a European trader uses EUR/USD as direct currency pair representation, while the same pair is indirect for an American trader.

If there is a quote of 0.80 EUR/USD, that means a trader needs 0.80 EUR to buy one USD.

As we all know, Forex trading includes simultaneous buying and selling of currencies. This means whenever you purchase a currency, you purchase a base currency while put on the market the quote currency.

The eighty-nine percent of the currency trading involves the USD and EUR/USD is always quoted indirectly, just because of writing convention.

The reverse of any currency pair can be easily written with little calculations, and currency pair representation does not follow any strict rules of writing it directly or indirectly.

Sometimes, the representation also changes with the country traders who find it more convenient to write currency pair depending upon the country in which traders are Forexing.

This is the matter of convention that's it. Now, you can use direct or indirect mode of representing the currency pair.

The article gives brief information on the Forex currency-pair representation method. It resolve the query whether the Forex trading currency pair can be written in reverse form from that of usual writing style as in EUR/USD.