**Currency Pairs and Quotations**: Currencies are traded in pairs (e.g., EUR/USD). The first currency is the base currency, and the second is the quote currency. The quotation shows how much of the quote currency is needed to purchase one unit of the base currency.
**Types of Currency Pairs**:
– **Major Pairs**: Most traded pairs involving USD (e.g., EUR/USD, GBP/USD).
– **Minor Pairs**: Pairs that do not involve USD (e.g., EUR/GBP, EUR/AUD).
– **Exotic Pairs**: Pairs involving a major currency and a less traded currency (e.g., USD/TRY).
– **Base and Quote Currency**: In a currency pair like EUR/USD, EUR is the base currency, and USD is the quote currency. The price shows how much USD is needed to buy one EUR.