Most Traded Currencies (Bid & Ask)
In the Foreign Exchange market (and essentially in all markets) there is a Buying and a Selling price. It is important to perceive these prices as a reflection of market condition.
Willing to Buy = the Ask
Willing to Sell = the Bid
FxGrow quotes very competitive spreads to customers. Generally speaking, the difference between the Bid and Ask rates reflect the level of liquidity in a certain instrument.
It's really quite simple to remember two things:
1- The first currency listed first is the base currency.
2- The value of the base currency is always 1.
A quote of USD/CAD 1.3326, that means that one (1) US Dollar is equal to 1.3326 Canadian Dollar. USD/JPY 132.55 shows that one (1) US Dollar is equal to 132.55 Japanese Yen.
In every trade involving the US Dollar, the dollar will be the base currency, with 4 exceptions - the British Pound (GBP), the Australian Dollar (AUD), the New Zealand Dollar (NZD) and the European currency unit Euro (EUR). In these cases when you see a quote such as GBPU/USD 1.2526, meaning that one (1) British Pounds equals 1.2526 US dollars.
Whenever the US dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 133.40, the dollar is stronger because it will now buy more yen than before.
Trades that do not involve the US dollar are called cross rates, but the premise is the same. A quote of GBP/CHF 1.1137 signifies that one British pound is equal to 1.1137 Swiss francs.