What is the Currency Cross?
Forex pairs that do not involve the USD are referred to as ‘cross pairs’. These are pairs such as the EUR / JPY and CAD / CHF.
Before currency cross pairs were created, trading different currencies was not as easy as it is today.
If someone wanted to exchange their currency into another currency they would first have to have it converted into USD. Only then could they exchange the USD for their desired currency.
For example; if someone wanted to exchange their Euros for Canadian Dollars they would first have to exchange their Euros for USD, and then convert the USD into Canadian Dollars.
As we discussed in the lesson; Forex Market History over time this changed with a few major events.
When the Forex crosses were created it enabled far easier and simpler exchange of one currency into another and bypassed the need for the USD.
Currency Cross Examples
Below is a list of currency cross examples;
CROSS Forex Pairs
EURO V JAPANESE YEN
CANADIAN DOLLAR V JAPANESE YEN
BRITISH POUND V JAPANESE YEN
AUSSIE DOLLAR V JAPANESE YEN
SWISS FRANC V JAPANESE YEN
EURO V NZ DOLLAR
EURO V CANADIAN DOLLAR