Cross Rate

AAA

DEFINITION of 'Cross Rate'

The currency exchange rate between two currencies, both of which are not the official currencies of the country in which the exchange rate quote is given in. This phrase is also sometimes used to refer to currency quotes which do not involve the U.S. dollar, regardless of which country the quote is provided in.

INVESTOPEDIA EXPLAINS 'Cross Rate'

For example, if an exchange rate between the Euro and the Japanese Yen was quoted in an American newspaper, this would be considered a cross rate in this context, because neither the euro or the yen is the standard currency of the U.S. However, if the exchange rate between the euro and the U.S. dollar were quoted in that same newspaper, it would not be considered a cross rate because the quote involves the U.S. official currency.

RELATED TERMS
  1. Currency

    A generally accepted form of money, including coins and paper ...
  2. Currency Convertibility

    The ease with which a country's currency can be converted into ...
  3. Quote Currency

    The second currency quoted in a currency pair in forex. In a ...
  4. Base Currency

    The first currency quoted in a currency pair on forex. It is ...
  5. Cross Currency

    A pair of currencies traded in forex that does not include the ...
  6. Currency Pair

    The quotation and pricing structure of the currencies traded ...
Related Articles
  1. The Fundamentals Of Forex Fundamentals
    Forex Education

    The Fundamentals Of Forex Fundamentals

  2. A Primer On The Forex Market
    Options & Futures

    A Primer On The Forex Market

  3. Top 7 Questions About Currency Trading ...
    Forex Education

    Top 7 Questions About Currency Trading ...

  4. Make The Currency Cross Your Boss
    Forex Education

    Make The Currency Cross Your Boss

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center