When people talk about the most common pairs traded on the Foreign Exchange Market you always hear EUR/USD...I was just wondering why you never hear about USD/EUR and is it the same thing?
2006-07-27 05:29:49 · 7 answers · asked by ? 2 in Business & Finance ➔ Investing
It's because many forex companies have you open up accounts in US dollars. So the US dollar is the BASE currency.
2006-07-27 05:57:11 · answer #1 · answered by marky m 2 · 0⤊ 0⤋
Common Sense and Dredude are right. The order of the pair listing is very important as it signifies which currency is being sold and which is being bought.
In the EUR/USD pair, the first currency is the base currency and the second is the quoted currency. So, if you issue a sell, you are selling the Euro and buying the dollar. If you buy, you're buying the Euro and selling the Dollar.
2006-07-28 01:14:17 · answer #2 · answered by 4XTrader 5 · 0⤊ 0⤋
In the Spot Forex Currency Market, all currency trades result in the simultaneous buying or selling of the first currency of the currency pair. For example, the first currency of the currency pair is always referred to as the base currency, EUR/USD - USD/JPY - GBP/USE - USD/CHF. Therefore; the base currency of the pair is the basis for a Buy or Sell trade.
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EUR/USD: If for example, a currency trader believes the US economy will continue to fall and that will hurt the U.S. Dollar, the currency trader would choose to buy the EURO, expecting the EURO to go up against the U.S. Dollar. On the other hand if the trader chooses to sell the EURO, he would be expecting the EURO to go down against the U.S. Dollar (sell the EUR/USD).
Short sales are no big deal in FX (unlike the stock market).
2006-07-27 06:35:57 · answer #3 · answered by Common Sense 7 · 0⤊ 0⤋
Common Sense got it right about Forex trading, but didn't answer the question.
You can only trade the Contracts that are offered. There is no flipped pair offered on the Forex. There are however flipped currency Futures contracts that are available.
2006-07-27 17:01:43 · answer #4 · answered by dredude52 6 · 0⤊ 0⤋
It is the same thing in reverse. Like the other side of the coin. Eur/Dlr means How much Euro to one dollar. Dlr/Eir means How much USD to one Euro. It is however forex parlance to quote in Eur/Dlr, same for GBP/USD, AUD/USD, and NZD/USD.
2006-07-31 01:08:25 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It's the same thing just flipped
2006-07-27 07:14:22 · answer #6 · answered by billysimas 3 · 0⤊ 0⤋
Yes, it's the same thing.
2006-07-27 05:33:15 · answer #7 · answered by Oh Boy! 5 · 0⤊ 0⤋