Cross rates: Difference between revisions
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''Foreign exchange.'' | ''Foreign exchange.'' | ||
Most foreign exchange rates are quoted against a widely traded currency, most commonly USD. | Most foreign exchange rates are quoted against a widely traded currency, most commonly USD. | ||
For example USD/EUR, USD/JPY. | For example USD/EUR, USD/JPY. | ||
The related cross rates are the foreign exchange rates between the other related currency pairs, calculated via the USD rates. | The related cross rates are the foreign exchange rates between the other related currency pairs, calculated via the USD rates. | ||
For example the EUR/JPY rate, as calculated via the USD from the USD/EUR and USD/JPY quotes. | For example the EUR/JPY rate, as calculated via the USD from the USD/EUR and USD/JPY quotes. | ||
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* [[Bid-offer spread]] | * [[Bid-offer spread]] | ||
* [[Foreign exchange rate]] | * [[Foreign exchange rate]] | ||
Revision as of 12:46, 5 August 2013
Foreign exchange.
Most foreign exchange rates are quoted against a widely traded currency, most commonly USD.
For example USD/EUR, USD/JPY.
The related cross rates are the foreign exchange rates between the other related currency pairs, calculated via the USD rates.
For example the EUR/JPY rate, as calculated via the USD from the USD/EUR and USD/JPY quotes.
Cross rate bid-offer spreads are normally wider than the bid offer spreads quoted against USD because they incorporate two bid-offer spreads against the USD, not just one.
