Quote Currency
The second currency in a pair — the one the price is expressed in.
Also called: counter currency · second currency
Written by Javier Sánchez Ros
In plain language
In EUR/USD the dollar is the quote currency. The price 1.0850 means one euro costs 1.0850 dollars.
Profit and loss are calculated in the quote currency, then converted to your account currency if they differ.
This conversion is why pip value is fixed on pairs quoted in your account currency and floats on all the others.
Worked through
A 40-pip win on one mini lot of EUR/GBP, account held in dollars
- Quote currency
- GBP
- Profit in quote currency
- £40.00
- GBP/USD on the day
- 1.2700
- Credited to the account
- $50.80
The trade was right about the euro against the pound, and the profit arrives in pounds, because pounds are what the price is quoted in. Only then is it converted into the currency the account is denominated in.
That second step is a separate, uncontrolled bet. Win the same 40 pips on a day when GBP/USD sits at 1.2400 and the identical trade pays $49.60 instead of $50.80. Nothing about the analysis changed; a currency you never chose to trade moved.
For a single trade the difference is loose change. Across a year of them it is a slow drift between the profit-and-loss you calculated from the charts and the balance the broker shows, and it accounts for most cases of "my numbers do not match the statement".
Why it matters
The quote currency determines your pip value, which determines your position size. On cross pairs, that value drifts with the exchange rate.
Common mistakes
- Assuming a fixed pip value on pairs not quoted in your account currency.
- Ignoring the conversion when reconciling expected and actual profit.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
The first currency in a pair — the one being bought or sold.
How much one pip of movement is worth in your account currency, given your position size.
Two currencies quoted against each other, showing how much of one buys the other.
The most heavily traded currency pairs, all involving the US dollar.
The standard smallest price increment in a currency pair — usually 0.0001.