Quoting of Foreign Exchange

Indication of Quoting In the foreign exchange market, the exchange rate between one country and the other country will emerge in pairs. Preceding is the base currency and target currency is at the back. They will be separated by “/” which shows one unit of the base currency equal how much of the target currency. For example, USD/JPY means having us dollars exchanging Japanese yen; EUR/USD means having euro exchanging us dollars. EUR/JPY means having euro exchanging Japanese yen.

Quoting of direct 、indirect、intersectional Quoting for having us dollars as the base currency called direct quoting. Quoting for having us dollars as the target currency called indirect quoting. Quoting for neither having us dollars as the base currency nor target currency called intersectional quoting Most currencies will be adopted for direct quoting. Euro、Strerling、Aussie will be used for indirect quoting.

Quoting of exchange rate for buying and selling The quoting of exchange rate will be BID and ASK, both present the role of exchange bank. For the base currency during the quoting. BID means exchange bank buy one unit of base currency from you (you sell one unit of base currency to the exchange bank) , and the exchange bank should pay you the price of target currency. ASK means exchange bank sell one unit of base currency to you (you buy one unit of base currency from the exchange bank t) , and you should pay you the price of target currency to the exchange bank. For example ： Bid/Ask (EUR/USD) as 1.1324 / 1.1329 Euro is the base currency, and the us dollar is the target currency. When you want to buy one unit of Euro, you should pay out 1.1329 us dollar which is according to the sell price of the exchange bank. When you want to sell one unit of Euro, you should get 1.1324 us dollar which is according to the buy price of the exchange bank.