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How To Read Currency Quotes When Forex Trading
Because of the immense volume of the Forex market, it is impossible for a single market’s force to noticeably control the market direction for any considerable length of time. At the end, market forces will prevail in the long run, making forex one of the most open and fair investment opportunities available.
Currency prices in the Forex markets are determined by a great number of factors influencing the value of the currency. Among the most important factors to consider are the economic and political conditions in the home country of the currencies you are willing to trade. Inflation, political stability, and interest rates are all highly considered for determining the price of any currency. Additionally, governments may try to establish some kind of control over the price of their currency by either intentionally flooding the market, to lower the price; or buying large quantities, to raise the price.
The first thing you should know for correctly reading currency quotes is that each world currency is given a three letter code which is used in forex quotes. The most common currencies for traders are: European euros (EUR), US dollars (USD), United Kingdom pounds (GBP), Australian dollars (AUD), Japanese yen (JPY), Swiss francs (CHF) and Canadian dollars (CAD).
Other important thing to learn is that the foreign exchange prices when trading forex are
indicated by quotes in a fraction like mode, called currency pairs. The first currency is called the 'base' and the second is called the 'quote' currency. In the following example: USD/EUR = 0.8517
This currency pair is formed by US dollars and European euros. The base currency (USD) is always considered ‘1’ and the quote currency shows how much it costs to buy one unit of the base currency. In this example, 1 US dollar costs 0.8517 euros.
If the price of the quoted currency goes up it will indicate that the base currency is becoming stronger; one unit of the base currency will buy more of the quote currency. If the quote currency falls, however, that means that the base currency is becoming weaker.
As you examine the data of any trading software you may be using, you will notice that forex quotes are seen in a 'bid' and 'ask' prices format. What ‘Bid’ means is the price that buyers will pay for the base currency, while at the same time selling the quote currency, and ‘Ask’ is the price at which the sellers will sell the base currency, while at the same time buying the quote currency.
Adrian Pablo is a Forex freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of forex trading, visit:
Written By: Adrian Pablo
 Telegraph.co.uk | FOREX-Dollar rallies broadly, euro down as inflation weighs Reuters - ... Boris Schlossberg, director of currency research at GFT Forex in New York. "On the other hand, the Obama stimulus package has also helped the dollar. ... Dollar soars against euro Forex − Dollar rose supported by US stimulus package FOREX-Dollar gains broadly, euro falls as data weighs |
 stv.tv | FOREX-Euro falls as ECB rate cut expectations grow Reuters - The euro fell to 3-week lows against both the dollar and sterling as a more dovish tone by some ECB policymakers and expectations that euro zone inflation ... Mid−Day Forex Technical Report − Dollar Firm after Mixed Data Forex News and Rumors FOREX-Euro loses traction; inflation outlook weighs |
 CEP News | Forex Market Update: Dollar Extend Gains Against Euro and Pound Daily FX, NY - Oil prices saw slight profit taking but Nymex crude futures still remained above $48. Gold prices continued to fall due to the weak dollar however, ... Market Overview by Forex Yard TheLFB 2009 Forex Update Eurozone Inflation drops to 26 year low |
 Globe and Mail | Fed Minutes Affect on the US Dollar Learning Markets, CA - The impact that this will have on the US dollar is uncertain. Movements in the forex are likely to be dictated more by a potential shift from risk free ... Fed saw big risks to economy despite low rates-minutes |
Conmed cuts Q4 view on forex changes, sales volume drop Reuters - The company, which also cut its 2009 outlook, said the weakening of the US dollar had a positive effect on its operations in the first three quarters. ... |
FOREX: Ringgit Opens Firmer Against Dollar Bernama, Malaysia - KUALA LUMPUR, Jan 7 (Bernama) -- The ringgit opened firmer against the US dollar today as the local unit was looking to test the 3.52 level this week, ... |
 Best Syndication | Forex Trading Signals Well-Positioned for Gains in the New Year Daily FX, NY - ... in US dollar pairs will likely generated further gains in standing Momentum and Breakout trades, and elevated implied volatility levels on forex options ... A Basic Understanding of the Forex Markets Forex – Canadian Dollar Equals US Dollar A Few Things You Need To Know About Forex Trading |
FOREX:Ringgit Ends Easier Against Dollar Bernama, Malaysia - KUALA LUMPUR, Jan 6 -- The ringgit closed easier today against the US dollar as the greenback rallied on positive developments including a stimulus package ... FOREX: Ringgit Opens Lower Against Dollar FOREX: Ringgit Ends Easier Against Dollar |
dollar higher at noon NEWS.com.au, Australia - ... currency trading firm Easy Forex, Franciso Solar, said investors increasing their willingness to buy riskier assets had given a boost to the dollar. ... FOREX - AUSTRALIAN DOLLAR ENDS HIGHER - JAN 5, 2009 Aussie at 3-month highs, hits 12-yr peak vs pound |
 The Money Times | Risk conditions weaken yen Forex Hound, NY - (If you cannot read the capcha, refresh the page) The comment will be reviewed by the Forex Hound Team before it is posted. Trading foreign exchange on the ... Dollar holds firm near 3-week high vs. yen |
