Quoted Currency

Currencies are quoted in terms of their value against one unit of another currency. The quoted currency is valued in terms of a so-called base currency i.e. the numerator is quoted in terms of a denominator. The currency whose numerical value is 1 is the base currency, while the other is the quoted currency. The base currency is the first in the currency pair and the quoted currency is the second. If the exchange rate for sterling/dollar was quoted at £1 = $1.40 sterling would be the base currency and the dollar the quoted currency. To value sterling in terms of the dollar at the same exchange rate sterling would be quoted at $1=£0.714.