Base currency

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Base currency

Applies mainly to international equities. Currency in which gains or losses from operating an international portfolio are measured.

Base Currency

In foreign exchange, the first currency listed in a currency pair. Normally, it is either the domestic currency or the dominant forex currency. Firms dealing in multiple currencies calculate all profits and losses in the base currency.

The base currency is assigned the value of 1 when calculating exchange rates. For example, if one is calculating the exchange rate of the U.S. dollar to the British pound and the pound is the base currency, it is expressed as GBPUSD and read as "dollars per one pound." See also: quote currency.
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To cope, financial systems will need to be able to process several valid interchangeable base currencies and transaction currencies.
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This means that the person in the example has three base currencies.
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