The Pairs

Relative Price Movement

The base currency is the "basis" for the buy or the sell. For example, if you BUY EUR/USD you have bought euros and simultaneously sold dollars. You would do so in expectation that the euro will appreciate (go up) relative to the US dollar.

Currency Abbreviations

EUR/USD

The euro is the base currency or the "basis" for the buy/sell.

For example, if you expect the US economy to experience a recessionary period which will be unfavorable for the US dollar, you would execute a BUY EUR/USD order. Here, you have bought euros in expectation that they will appreciate versus the US dollar.

If you expect the US Federal Reserve will raise the overnight lending rate (Fed Funds) which will cause the Euro to weaken against the US Dollar, you would execute a SELL EUR/USD order. Here you have sold Euros in expectation that they will depreciate versus the US Dollar.

USD/JPY

The US dollar is the base currency or the "basis" for the buy/sell.

For example, if you expect the Bank of Japan to intervene by selling Yen for political reasons; you would execute a BUY USD/JPY order. Here you have bought U.S Dollars in the expectation that they will appreciate versus the Japanese Yen.

If you expect global sentiment to shift and investors withdraw capital from the U.S. and deposit them in the Japanese capital markets, you would execute a SELL USD/JPY order. Here you have sold U.S dollars in expectation that they will depreciate against the Japanese yen.

GBP/USD

The GBP is the base currency or the "basis" for the buy/sell.

For example, if you expect the Bank of England (BOE) to raise interest rates indicating a strong economy, you would execute a BUY GBP/USD order. Here you have bought Great British Pounds in expectation that they will appreciate versus the US Dollar.

If you expect the UK economy will suffer from a weak GDP growth period, you would execute a SELL GBP/USD order. Here you have sold Great British Pounds in expectation that they will depreciate against the US dollar.

USD/CHF

The USD is the base currency or the "basis" for the buy/sell.

For example, if you expect the Swiss economy to weaken, you would execute a BUY USD/CHF order. Here you have bought US Dollars in expectation that they will appreciate versus the Swiss Franc.

If you expect the US Government to adopt a weak dollar policy, you would execute a SELL USD/CHF order. By doing so you have sold US Dollars in the expectation that they will depreciate against the Swiss Franc.