Cross Pair
Trading BasicsA currency pair that does not include the US dollar. Cross pairs are traded directly without converting through USD first. Synonymous with minor pair.
What Is a Cross Pair?
A cross pair (or cross-rate) is any Currency Pair that does not include the US dollar. Before electronic trading, converting between two non-USD currencies required two separate transactions through USD. Today, cross pairs trade directly, but historically they were "crossed" through the dollar.
Popular Cross Pairs
The most liquid cross pairs include EUR/GBP, EUR/JPY, GBP/JPY, EUR/CHF, and AUD/NZD. These pairs have their own market dynamics independent of the US dollar. For example, EUR/GBP is heavily influenced by Bank of England and European Central Bank policy differences, while AUD/NZD responds to commodity prices and the economic relationship between Australia and New Zealand.
Cross Pair Pricing
Your broker calculates cross pair prices from the two underlying USD pairs. EUR/GBP, for example, is derived from EUR/USD divided by GBP/USD. This means Spreads on crosses are typically wider than on the component major pairs. Some traders monitor the USD pairs alongside their cross pair trades for additional context.
Related Terms
Major Pair
A currency pair that includes the US dollar and one of the other most traded currencies. The seven majors are EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD, and NZD/USD.
Minor Pair
A currency pair that does not include the US dollar but consists of other major currencies. Examples include EUR/GBP, EUR/JPY, and GBP/JPY. Also called cross pairs.
Currency Pair
Two currencies quoted together showing how much of one currency is needed to buy one unit of the other. EUR/USD = 1.0850 means 1 euro costs 1.0850 US dollars.
Exchange Rate
The price of one currency expressed in terms of another currency. EUR/USD at 1.0850 means 1 euro equals 1.0850 US dollars.