Countervaluutta

Countervaluutta, in financial markets often called countercurrency or quote currency, is the currency against which another currency is valued in a currency pair. In a pair, there is a base currency (the currency being priced) and a countercurrency (the currency in which the price is quoted). The exchange rate expresses how many units of the countercurrency are needed to buy one unit of the base currency.

For example, in EUR/USD 1.1200, the base currency is the euro and the countercurrency is the US dollar; the price shows how many dollars are required to buy one euro. In USD/JPY 109.50, the base is the US dollar and the countercurrency is the Japanese yen; the price shows how many yen are needed to buy one dollar.

The countercurrency role is primarily to provide the unit of account for the quote. The choice of countercurrency is influenced by market conventions and liquidity. The US dollar is the dominant countercurrency in global foreign exchange markets, with the euro, yen, and pound sterling also frequently serving as countercurrencies in various pairs. A currency pair can be quoted with any currency as the countercurrency, but liquidity and market activity often determine which pairs are most actively traded.

In practice, understanding the countercurrency is essential for interpreting quotes, performing conversions, and calculating cross rates. When converting or hedging, traders use both the base currency and the countercurrency; cross-rate calculations often involve a common reference countercurrency, such as the US dollar. The term is most common in FX contexts and may appear with language-specific variations.