I was recently watching the Forex market and I want to know what does it means when you see something like
EUR/USD -0.04% -1.1208
Does that mean the USD dropped with 0.04% against EUR or vice versa? Can you please also extend the explanation to stock indices?
When the forex market does a quote, it is done in currency pairs. When you sell a currency, you have to be buying something in return. That is why they are quoted in pairs.
For example when you buy an apple, you are selling your dollars to get it. Similarly in forex, when you sell EUR to get USD, you are using the EUR/USD currency pair, or USD/EUR depending on which way you want it, one is simply the inverse of the other.
However, these pairs are counter-intuitive in a such a way that they are not fractional terms. It is simply a quote. What I mean is that in the quote EUR/USD, it is expressing how much 1 EUR is worth in USD and in USD/EUR, how much 1 USD is worth in EUR. The first currency in a pair is called the "Base" currency and the second is called "Quote" or "term" currency. Think of it this way, the first currency in a pair is your "commodity" currency and the second currency is its price.
As for what "EUR/USD -0.04% -1.1208" means, I think I'll need more context to it. If by -0.04%, you mean that EUR/USD has dropped by 0.04%, in example, it simply means that if 1 EUR is 1.128 USD, it is now 1.1275 USD. Therefore, your EUR is now cheaper, USD has appreciated against the EUR or, EUR has depreciated against the USD, or a combination of both.
If you are confused, just remember the first currency in a pair is your "commodity" currency. Replace EUR with apples and you should see it clearer.
EUR/USD should be the value of one euro divided by the value of one dollar. Right now that seems to me to be about $1.1275$: in other words, $1$ euro is worth about $1.1275$ dollars. I suspect this is the final number in your expression.
If it had been USD/EUR then I would expect the reciprocal value $0.8869$ so $1$ dollar is worth about $0.8869$ euros
My guess is that $-0.04\%$ is the percentage change in the EUR/USD rate so the euro would have fallen by a tiny amount against the dollar. Whether this is since opening of the market today, or since the close yesterday or since a year ago is less clear.
