Counter currency is used as a reference for quoting a currency pair. The counter currency is the second currency in that pairing. A slash is used between the currency and counter currency to indicate their relative values. For example, EUR/USD 1.4431 means 1 euro is worth 1.4431 dollars. The dollar is the counter currency in this case, but the relation could easily be reversed. USD/EUR 0.692953 is the same relationship with the euro as the counter currency instead. Major currencies, such as the euro and U.S. dollar, are more likely to be the base currency in a currency pair. It is important to understand the structure of the currency pair in order to understand forex trading. In the currency pair USD/EUR the euro (EUR) is considered the counter currency. In the pair, units of counter currency are per unit of base currency. [Source:
http://www.investorguide.com]
Sayed Farrukh Ahmed
Assistant Professor
Faculty of Business & Economics
Daffodil International University
