Quoting Standards

Currencies are quoted in pairs, such as EUR/USD or USD/JPY. The base currency is the "basis" or your premise for the buy or the sell. For example, if you BUY GBP/USD you have bought pounds and simultaneously sold dollars. You would do so in expectation that the British pound will appreciate (go up) relative to the US dollar.

USD/JPY

The base currency that is used in forex trading is the US Dollar.

For instance, if the Bank of Japan were to intervene by selling Yen, for entirely political reasons, the most obvious thing a trader would do is to execute an order called the BUY JPY/USD order. Basically, here the US dollars are bought in the anticipation that they will appreciate when compared to the Japanese Yen.

If you expect global sentiment to shift and investors withdraw capital from the U.S. and deposit them in the Japanese capital markets, you would execute a SELL USD/JPY order. Here you have sold U.S dollars in expectation that they will depreciate against the Japanese yen.

GBP/USD

When it comes to buy/sell, the base currency is GBP.

Suppose, the Bank of England were to raise the rate of interest then you would automatically issue a BUY GBP/USD order. Here the GBP has been bought with the expectation that it will appreciate the USD.

If in case you anticipate that the UK economy would suffer a weak GDP, then the order issued by you would be a SELL GBP/USD order. Here the GBP is sold in anticipation that it will depreciate against the USD.

USD/CHF

When it comes to buy/sell, the base currency is USD.

If the Swiss economy is expected to weaken, then a BUY USD/CHF order will be executed. Here, the USD are bought in anticipation that they would appreciate versus the Swiss franc.

If you expect the US Government to adopt a weak dollar policy, you would execute a SELL USD/CHF order. By doing so you have sold US Dollars in the expectation that they will depreciate against the Swiss Franc.