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When a currency is quoted in the FX market, it’s generally quoted in terms of another currency.

When trading currencies, you’re not just trading one product, you’re trading two currencies against each other.

The ratio of the two is what’s known as a currency pair.

The quote for a currency pair references what it costs to convert one currency into the other.

For example, if the British pound is trading at $1.20, that simply means 1.2 U.S. dollars will buy you a pound.

To figure out how many pounds it would take to buy a U.S. dollar, take the inverse:

1 / 1.20 = 0.833

So £0.833, or 83.3 pence, will buy you one U.S. dollar.