What is cross-currency exchange rates

Cross-rates of currencies online – this is one of the most important tools that forex traders use to track the quotations of currency pairs. Cross-rates give us information about currency conversion data. These courses have nothing to do with those provided by banking institutions. Cross-rates of currencies operate with terms such as base and quoted currency. The base currency is the currency for which you need to pay the number of quoted currency. In other words, the cross-rate of online currencies gives us the opportunity to track how many units of quoted currency we will need to give per unit of base. When calculating this value first, we always specify the base currency, and then quote. This order is very important for such calculations. There are also currencies on the market that do not have cross-rates. This is usually the currencies that rarely fall into the eyes of traders and other exotic currencies. Their cross-rate can be calculated through a third currency. And this, often, is the US dollar.

 

How to use the cross currency rate table

Most often use a cross-currency exchange table for forex. Use this table to calculate the trader, whether he will be in the black or get a loss. To start using the table of cross-currency rates, we will need to select a base and quoted currency. Next, we study the table and extract from it the necessary data on the conversion rates of the currencies we need. Based on the results of the table, we can make a forecast, which transaction is better to conclude and at what time. for example

We want to exchange the Euro for dollars. On the day of exchange, we have a definite course for this currency pair. But, having studied the data of the cross-currency rates table online, we learn that such an exchange will not be the most profitable for us. For a more profitable exchange, we will need to use one more currency in our chain of operations. In the end, we make one exchange operation and then another. And we get as a result an amount that will be much larger with direct exchange.

 

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