Cross-Currency Pair

What is a Cross-Currency Pair in Trading?

A cross-currency pair is any currency pair that does not include the U.S. Dollar (USD). Instead of going through the Dollar as a middle step, you can trade two other currencies directly.

For example, if you wanted to trade Euros for Japanese Yen, you don’t need to convert Euros into U.S. Dollars first. With a cross-currency pair like EURJPY, you can trade them directly.

These pairs are also called cross currency, cross currency pairs, or forex cross pairs.

Examples of Cross Pairs

Some common cross currency pairs include:

• EURJPY (Euro / Japanese Yen)
• GBPAUD (British Pound / Australian Dollar)
• EURGBP (Euro / British Pound)

How to Trade Cross-Currency Currency Pairs Work?

Trading cross currency pairs works the same way as any other forex pair:

1. Choose a cross pair (for example, EURJPY).
2. Buy if you think the first currency (EUR) will rise in value compared to the second (JPY).
3. Sell if you think the first currency will fall compared to the second.

You don’t actually own the currencies, you’re just speculating on price changes through your broker or CFD platform.

Why Trade Cross Currency Pairs Instead of Major Pairs?

• More opportunities: Cross pairs give access to global currencies outside of the U.S. Dollar.
• Avoid USD influence: Major news from the U.S. doesn’t always affect your trade if you’re in a cross-pair.
• Diversification: They help spread risk across different economies.
• Unique price moves: Cross pairs often behave differently than U.S Dollar-based pairs, which can create new trading setups.