In foreign exchange, currencies are traded in pairs.

For example, in EURUSD, the euro is the base currency, and the US Dollar is the quote currency.Similarly, in AUDUSD, the Australian dollar is the base currency whereas the US Dollar is the quote currency.

The base currency is the left-most currency in a pair. Where the quote currency is the right-most currency in the pair.

The exchange rate of any currency pair denotes how many units of the quote currency are needed to purchase 1 unit of the base currency. For example, if the exchange rate of the EURUSD is 1.13510 then it simply means that to buy one euro, the equivalent of 1.1351 US Dollars is needed.