Do you wish to keep steady prices? Watch “The secrets Behind Layered Hedging Programs”
webinar to learn how to smooth the hedge rate over time
Watch it now

Glossary

Navigate the complex world of currency management with our comprehensive dictionary of financial terms and definitions.

Home
>
Glossary
>
Cross Rates

Cross Rates

Cross rates are exchange rates between two currencies that do not involve the most traded currencies: USD and EUR. Examples of well-known cross rates are GBP-JPY and AUD-NZD. As with currencies involving USD and EUR, the base currency is the first currency appearing in the pair quotation. Cross rates are linked by triangular arbitrage. If GBP-USD trades at 1.30 and USD-JPY trades at 105, then GBP-GBP must trade at or very close to 136.50 to make arbitrage impossible.