Currencies are traded in pairs, each being a combination of three letters. The first currency is the “base currency” and the second the “quote currency”. The currency pair shows how much of the quote currency we need to purchase one unit of the base currency. Let’s use EURUSD as an example. The EUR is the base currency and the USD the quote currency. If EURUSD was trading at 1.1610, we would need to pay $1.1610 to buy 1€.