where 
in a direct quote a higher exchange rate implies that the domestic currency is depreciating or becoming weaker since the price of the foreign currency is effectively rising and vice versa thus if the usd jpy direct quotation changes from 100 to 105 it indicates the yen is weakening against the dollar because it would take 5 more yen the local currency to buy 1 usd the foreign currency the u s dollar usd is the most actively traded currency in the world in the context of trading rooms and professional publications most currencies are quoted as the number of foreign currency units per dollar this means that the dollar serves as the base currency whether the speaker is in the united states or elsewhere an example of a direct quote using u s dollars might be stating 1 17 canadian per u s dollar rather than 85 5 u s cents per canadian dollar which would be the indirect quote a major exception to the dollar base quote rule is when the british pound gbp is quoted against other currencies including the dollar but with the exception of the euro this reflects the fact that the pound was the world s dominant currency in the years leading up to world war ii and before the ascendancy of the u s economy the exchange rate for the pound would thus be quoted as 1 45 per 1 regardless of whether this is considered direct in the united states or indirect in the united kingdom the euro eur came into existence on jan 1 1999 as the unit of account for participating european union eu member nations notes and coins were first issued on jan 1 2002 the euro replaced many major traded european currencies including the german mark the french franc and the dutch guilder the european central bank ecb which oversaw the conversion intended the currency to be the financial market s dominant currency it specified that the euro should always be the base currency whenever it is traded including against both the u s dollar and the british pound for this reason quotes are always the number of dollars pounds swiss francs or japanese yen needed to buy 1 