Forex glossary
quote currency (counter currency)
The quote currency is the second currency in a pair and expresses the price of one base unit. In a linear FX model, price difference times base quantity produces P/L in quote currency. An account denominated in another currency requires conversion.
Illustrative example
How does it work in practice?
At a hypothetical EUR/USD rate of 1.20 USD per EUR, 500 EUR is valued at 600 USD with no fees. USD is the quote currency because it expresses the price of one euro.
A case to work through
A price and result in yen
Model: USD account, long 800 EUR/JPY; fills 160.00 and 160.25 JPY/EUR.
- The difference is 0.25 JPY/EUR.
- 800 EUR × 0.25 JPY/EUR gives 200 JPY before USD conversion.
What follows? Name the result currency before finding a conversion rate.
Example boundary: No JPY/USD conversion rate is given, so USD P/L is not determined.
P/L units before conversion
Text description of the diagram
- Base quantity: 800 EUR.
- Price difference: 0.25 JPY/EUR.
- Quote-currency P/L: 200 JPY; no USD conversion rate is given.
A useful distinction
quote currency (counter currency) / Base currency
Base currency defines quantity; quote currency expresses its price.
Check your understanding
Label the result’s units before account conversion.
Show the answer and explanation
GBP
It is the second currency, expressing the euro’s price.
Pair units and result currency
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Related terms
Sources and documentation
- ECB: euro reference exchange rates
Currency units and reference quotations, not executable prices or invented case datasets.
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.