What is a Quote Currency?

In foreign exchange transactions, the quote currency is the currency that fluctuates in comparison to the base currency. For example, when at an exchange rate of 1.5 Euros per U.S. Dollar, the Euro is the quote currency and the U.S. Dollar is the base currency. The quote currency is the second currency quoted in a currency pairing, which is the currency that one is paying with. It is essential to understand the nature of a quote currency if you want to engage in currency trades.

In a currency price quote, the abbreviations representing currencies are set by the International Organization for Standardization, in its ISO 4217 standard.