The first currency listed in a forex currency pair, against which the exchange rate is quoted. In the pair EUR/USD, for example, the euro is the base currency and the price shows how many US dollars are needed to purchase one euro. Understanding which currency is the base is essential for interpreting forex quotes, calculating position sizes, and determining profit or loss on a trade.
Example
“In the GBP/JPY pair, the British pound is the base currency, so a quote of 188.50 means one pound buys 188.50 Japanese yen.”