Community Forex Questions
What is cross currency pair?
Cross-currency pairs are pairs that are not associated with USD, for example, audcad, audchf, audnzd, audjpy, cadjpy, chfjpy, eurjpy, eurgbp, eurchf, eurnzd, etc.
A cross-currency pair, also known as a cross rate, is a currency pair in the forex market that does not include the US dollar (USD). Instead, it involves the exchange rate between two other currencies, such as the Euro (EUR) and the British Pound (GBP), forming the EUR/GBP pair. Historically, most currency transactions were quoted against the USD, but cross-currency pairs allow traders to bypass the USD and directly trade two non-USD currencies. This can offer more opportunities for profit and diversification in trading strategies. Popular cross-currency pairs include EUR/GBP, EUR/JPY (Euro/Japanese Yen), and GBP/JPY (British Pound/Japanese Yen). Trading these pairs often requires understanding the economic and political factors influencing both currencies involved, as their movements can be less predictable than USD-based pairs.
Jul 13, 2021 07:35