To exchange currencies or conduct international trade, two currencies are frequently used in Forex: base and quote. The quote or counter currency compares and determines the value of the base currency using a standard 1 unit.
Claire, an American, for example, wishes to visit Australia. She wishes to organize her finances for the trip. Her base currency is USD, and her quote currency is AUD. She discovered she could exchange 1.44 AUD for 1 USD.
One of the primary distinctions between the base and quote currencies is that the domestic currency is used as the base in a direct quote, whereas the domestic currency is used as the quote in an indirect quote.

In forex trading, the base currency is the first currency listed in a currency pair, while the quote currency is the second. For example, in the pair EUR/USD, EUR is the base currency, and USD is the quote currency. The exchange rate indicates how much of the quote currency is needed to purchase one unit of the base currency. If EUR/USD is 1.20, it means 1 euro equals 1.20 US dollars. The base currency represents the trader's account denomination or the currency being bought or sold. The quote currency shows the value relative to the base currency. Understanding these roles helps traders read and interpret forex prices accurately, facilitating informed trading decisions.