ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In forex, the base currency represents how much of the quote currency is needed for you to get one unit of the base currency. For example, if you were looking at the CAD/USD currency pair, the Canadian dollar would be the base currency and the U.S. dollar would be the quote currency.

Detailed explanation-2: -A base currency is the first currency that appears in a forex pair quotation. In the foreign exchange market, one currency will always be quoted in relation to another because you are buying one while selling the other.

Detailed explanation-3: -The U.S. dollar is frequently used as the base currency, since it is the dominant currency in the world economy, and so is most frequently used to pay for transactions.

Detailed explanation-4: -The first three-digit code used to designate a currency in a currency pair quotation is called the base currency, and the second currency is called the quote currency. The currency pair indicates how much of the quote currency is needed to purchase one unit of the base currency.