What are the Currency Exchange Rates and Spreads?
The currency exchange market determines currency exchange rates. A currency exchange rate is always quoted for a currency pair. For example, PKR/USD refers to the two currencies Pak Rupee and U.S. Dollar. The first is referred to as the base currency, while the second as the quote currency. More generally, if buying, an exchange rate specifies how much you have to pay in the quote currency to obtain one unit of the base currency, and if selling, the exchange rate specifies how much you get in the quote currency when selling one unit of the base currency. A currency exchange rate is typically given as a pair consisting of a bid price and an ask price. The ask price applies when buying a currency pair and represents what has to be paid in the quote currency to obtain one unit of the base currency. The bid price applies when selling and represents what will be obtained in the quote currency when selling one unit of the base currency. The bid price is always lower than the ask price.
