Monday, July 17, 2017

Cross Rate

Cross Rate (cross rate).

The basis of the appearance of the term was the quotation of foreign currencies to each other, after the basis of direct quotations from the US dollar began to speak.

Cross Rate (cross rate) - an ode to the exchange rate currency to another, with both of the currencies in the quote is not the US dollar. In this case already it does not matter in which country held an exchange transaction.



In order to establish the exact relationship between the currencies in cross quotation, first each of the currencies appreciate against the US dollar. Therefore, when changing the weakening or strengthening of the US currency and the change takes place most courses of other world currencies.

When calculating cross rates typically used a pretty simple formula

B / A = B / USD x USD / K in this formula, B - the base currency in a currency pair, K - quoted, USD - US Dollar.

More to understand how this calculation can be carried out by way of example cross rate:

GBP / JPY = GBP / USD x USD / JPY = 1,55 x 144.894 = 93.48 that is for one British pound give 144.894 Japanese Yen.

At the same time in different dealing centers get quotes may have slightly different values ​​currently associated with a difference in spreads and a delay in the supply of data.

Currently, it is not necessary to independently engage in such calculations to produce crosses of any of the currency pairs simply to know the current market price in the currency market.

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