In foreign exchange market currencies are exchanged for one another and traded in pairs. All currencies in the world have an internationally accepted three letter abbreviations as specified by the International Standards Organization (ISO). While describing a local currency, most countries use their country’s first letter as a currency name, although in international context this also leads to confusion. Thus, each currency has its own ISO currency code (ISO 4217-Codes for the Representation of Currencies and Funds). The general principle of currency abbreviations is to take the two-letter abbreviations defined in ISO 3166 (Codes for the Representation of Names of Countries) adding the first letter of the currency name (e.g., USD for the United States Dollar).
Below is a table with a list of standard currency abbreviations. Other investment vehicles are also available under specific symbols:
|NZD||New Zealandian dollar|
Quote currency (counter currency) is the currency, which is used as a reference; base currency (transaction currency) is when the currency is quoted in relation.
The most popular traded currency pair is the relation of EUR/USD. The quotation EUR/USD 1.2500 means: one euro is exchanged for 1.2500 US dollars.
The widely traded currency pairs in the world are called the Majors. In general, the eight most traded currencies are the U.S. dollar (USD), the Canadian dollar (CAD), the euro (EUR), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian dollar (AUD) and the Japanese yen (JPY).