How to read forex quotes

Currency pairs consist of two parts: the base (first) currency and the quote (second) currency. The exchange rate for a currency pair specifies how much of the quote currency is needed to buy one unit of the base currency.

So, if the exchange rate of the EUR/USD pair is 1.12302, this means that you will need the amount of 1.12302 USD to buy 1 EUR.

As shown in the Deriv MT5 platform example below, CFD brokers typically quote currency pairs with two prices: the bid price (for selling) and the ask price (for buying). The difference between these prices is called the spread, which, in essence, represents the transaction cost when entering or exiting a trade.