Valuuttaparilla

Valuuttaparilla, or currency pair, is the basic unit of trade in the foreign exchange market. It represents the value of one currency relative to another and is used to express how much of the quote currency is needed to buy one unit of the base currency. The pair consists of a base currency (the first currency) and a quote currency (the second currency). For example, in EUR/USD, the price 1.0900 means one euro costs 1.09 US dollars.

Prices are quoted in pips, the smallest standard movement. For most pairs, a pip equals 0.0001; for currency pairs involving the Japanese yen, one pip equals 0.01. Quotes are typically shown with four or five decimals for most pairs, while yen pairs use two decimals. Trading sizes include standard lots (100,000 units), mini lots (10,000), and micro lots (1,000).

Market structure classifies currency pairs as majors, minors (crosses), and exotics. Major pairs include EUR/USD, USD/JPY, and GBP/USD, known for high liquidity and tighter spreads. Minor crosses exclude the US dollar, such as EUR/GBP or EUR/CHF. Exotic pairs involve at least one currency from a smaller economy and tend to have higher spreads and more volatility.

Trading occurs over the counter through brokers and platforms, not on a single centralized exchange. Prices move in response to factors such as interest rate differentials, macroeconomic data, geopolitical events, and market sentiment. Currency pairs are used for speculation and hedging, allowing traders to bet on or protect against changes in exchange rates.

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