In plain English
What Quote currency means
The quote currency sits to the right of the slash. In EUR/USD at 1.08435, the number means one euro costs 1.08435 U.S. dollars. When the quoted rate rises, the base currency has increased in value relative to the quote currency; when it falls, it has decreased relative to that currency.
Why it matters
The quote currency helps determine how a price is read and how profit or loss is first denominated in a simplified spot calculation. For example, a change in EUR/USD naturally produces a result in U.S. dollars for a position measured in euros. An account held in another currency may then require conversion.
Example
Suppose USD/JPY is 156.20. USD is the base currency and JPY is the quote currency, so one U.S. dollar is priced at ¥156.20. If the rate rises to 156.50, the move is ¥0.30 per US$1, or 30 pips using the usual yen-pair pip convention.
Quick answers
Common questions
How can I identify the quote currency?+
It is the second three-letter currency code in the pair. In GBP/USD, USD is the quote currency; in USD/CHF, CHF is the quote currency.
Does a rising EUR/USD mean the U.S. dollar is rising?+
Not relative to the euro. A rising EUR/USD means more U.S. dollars are required to buy one euro, so the euro has risen relative to the U.S. dollar, or the dollar has fallen relative to the euro.
Sources