Cross-Currency Transaction


DEFINITION of 'Cross-Currency Transaction'

A cross-currency transaction is one which involves the simultaneous buying and selling of two or more currencies. An example is the purchase of Canadian dollars with yen and the simultaneous sale of yen for U.S. dollars. The term is also used generically for any transaction that involves more than one currency, such as a currency swap.

BREAKING DOWN 'Cross-Currency Transaction'

Cross currency transactions are most common for multinational corporations or international bond funds that manage or hedge their currency exposure. Sometimes all the transactions are effected in one country without the use of that country's currency, which is referred to as a currency cross.

  1. Currency

    Currency is a generally accepted form of money, including coins ...
  2. Exchange Rate

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  3. Cross-Currency Settlement Risk

    A type of settlement risk in which a party involved in a foreign ...
  4. Cross-Currency Swap

    An agreement between two parties to exchange interest payments ...
  5. Commodity Pairs

    The three forex pairs which include currencies from countries ...
  6. Forex - FX

    The market in which currencies are traded. The forex market is ...
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