Currency is generally an accepted form of money, including coins and paper notes, which is issued by a government and circulated within an currency exotic forex in pair. Used as a medium of exchange for goods and services, currency is the basis for trade. Directly put, ‘What is the value of the GBP against the USD? One currency normally has a greater value than the other.
This is mostly reflected by a countries economic status. In the above example, the GBP is called the base currency and USD is called the quote currency. Conversely, when you sell the currency pair, you sell the base currency and receive the quote currency. So in the above example, the bid or buy price represents how many USD are needed to buy one unit of the GBP. In previous articles, I mentioned go long and go short without properly explaining. That is what It basically means to go long or go short on a currency pair. GBP was going to gain value against the USD.
GBP was going to lose value against the USD. Traders buying currencies are referred to as Bulls. Traders Selling currencies are referred to as Bears. USD pair today, meaning the price is going up. USD pair and the forex chart is displaying the value of the GBP against the USD going up up and up. USD today meaning the pound price is depreciating against the dollar.
Bid on the left Ask on the Right. The ask price is also refereed to as the offer price. The broker or bank always buys currency at a cheaper price than they sell it. That is how they make their margin.
Your broker offers the ask price, so in the above example the asking price for a trader to buy the GBP would be the value quoted on the right side. 0466, they would have to wait for the value to go up and above 2. 0466 in order to sell the pair for a profit. If the price remains exactly the same, they would have to sell it at a loss, because the broker will always buy at a lower price. So if the value stays the same or lowers you will be losing money if you had bought the pair. The same applies if you sold the pair and the price went up instead. Currency Symbols always have three letters.