When two currencies do not have a direct exchange rate, the exchange rate that must be calculated indirectly through the third currency is the cross exchange rate or the collated exchange rate. A currency pair without the US dollar in a currency pair is called cross trading, and a currency pair with a US dollar in the currency pair is called direct trading. Through any two straightforward disks, the exchange rate of a cross disk can be calculated, that is, the cross rate.

## Calculation of cross exchange rate:

Both currency pairs are direct quotation methods, or both are indirect quotation methods and can be calculated by cross-division of exchange rate: (that is, the buying price of one natural order is divided by the selling price of the other direct order, one direct order The selling price of the order divided by the buying price of another direct order.)

For example:

USD/CHF=1.4000/1.4010,

USD/JPY=123.50/60,

How much Japanese Yen=1 Swiss franc?

Buying price: 123.5/1.4010=88.15 88.15 yen=1 Swiss franc

Selling price: 123.6/1.4=88.29 88.29 yen=1 Swiss franc

So Swiss franc/Japanese yen (CHF/JPY)=88.15/88.29

Suppose one of the two currency pairs is the direct quotation method, and the other is the indirect quotation method. In that case, the direct multiplication method is used: (that is, the purchase price of one natural order is multiplied by the purchase price of the other direct order, and the other is the direct order and multiplied by the selling price of another direct order).

For example:

USD/JPY=123.50/60,

EUR/USD=1.0510/20,

1 Euro=How much JPY?

Buying price: 123.5*1.0510=129.68 129.68 yen = 1 euro

Selling price 123.6*1.0520=130.03 130.03 yen = 1 euro

So Euro/JPY (EUR/JPY)=129.68/130.03