Cross Rates

In this article, We learn about "Cross Rates".Let's Go!

Cross Rates is used to calculate exchange rates for currency pairs where exchange rates are not commonly used.

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

This process is called a cross rate because the exchange rate is calculated by comparing the value of each currency in the pair with a third (major) currency (usually the US dollar).

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

The term "cross rate" can also be used to refer to any currency pair that does not include the U.S. dollar.

The base currency always has a value of 1 and is the reference currency for the exchange rate of the currency pair.

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