Home » Cross Rate

Cross Rate

« Back to Glossary Index

Last Updated on: 9th February 2021, 09:56 pm

The term “cross rate” can also be used to refer to any currency pairs that do not include the U.S. dollar. Cross rates are used to calculate the exchange rate for a currency pair whose exchange rate is not commonly quoted.

For example, EUR/GBP, CHF/JPY, or AUD/NZD.

This process is known as a cross rate because the exchange rate is calculated by comparing the value of each currency in the pair against a third (major) currency, usually the U.S. dollar.

For example, if you know the AUD/USD and NZD/USD exchange rates, you can cross these to calculate the AUD/NZD exchange rate.

The base currency always has a value of one, and is the reference currency for the exchange rate of the currency pair.

Monetary Policy

Monetary policy refers to the actions taken by a nation’s central bank to influence the availability and cost of money and credit to Read more

Kathy Lien

Kathy Lien is an expert in global currencies, author, and Managing Director of BK Asset Management. For retail FX traders back Read more

European Parliament

The European Parliament is the European Union’s law-making body. It is directly elected by EU voters every 5 years. It is a Read more

Open Position

An active trade that has yet to be closed.

« Back to Glossary Index