Cross pair
A currency pair that does not include the US dollar, such as EUR/GBP, EUR/JPY or AUD/NZD. Also called a cross or cross-currency pair.
Historically, most currency conversions went through the US dollar: to exchange euros for yen you would sell euros for dollars, then dollars for yen. A pair quoted directly without the dollar became known as a cross rate. Today crosses are quoted and traded directly, but the name has stuck.
Examples
- Euro crosses: EUR/GBP, EUR/JPY, EUR/CHF, EUR/AUD.
- Yen crosses: GBP/JPY, AUD/JPY, CAD/JPY.
- Others: GBP/CHF, AUD/NZD, AUD/CAD.
The terms overlap with minor pair. Many people use "cross" and "minor" to mean the same thing; others reserve "minor" for crosses between the main currencies.
How a cross price relates to the dollar pairs
A cross can be derived from two dollar pairs. Illustratively, if EUR/USD is 1.0800 and USD/JPY is 150.00, then EUR/JPY is about 1.0800 times 150.00, or 162.00. In practice, dealers quote crosses directly, but arbitrage keeps them consistent.
Costs and leverage
Crosses between heavily traded currencies, such as EUR/GBP and EUR/JPY, are liquid and usually have tight spreads, though often wider than EUR/USD. Thinner crosses cost more. Under ESMA rules, pairs made only of USD, EUR, JPY, GBP, CAD and CHF count as majors for leverage (30:1), so EUR/GBP gets 30:1 while AUD/JPY and other pairs get 20:1.
Practical note
Crosses let you express a view on two non-dollar economies, for example the euro against sterling, without direct dollar exposure. See currency pairs explained and the EUR/GBP profile.
Not investment advice. This is general information and education, written without knowledge of your circumstances. It is not a recommendation to buy or sell any instrument. Past performance is not a reliable indicator of future results. Trading leveraged products carries a high risk of losing money. Risk warning