What is a Cross Rate?
Cross rates are the current exchange rates between two currencies. The cross rate differs from a currency pair in that a true cross rate must involve two currencies that are not the standard for the country where the evaluation of the exchange rate takes place. By contrast, a currency pair would involve the comparison of the current rate of exchange between the home currency and that of another nation. A cross rate in the United States would not involve the comparison of the current rate of exchange with any other national currency. Instead, it would involve the comparison of two currencies that are not native to the USA. An example of a cross rate conducted in the United States would be a comparison of the rate of exchange between the British pound and the Japanese yen. In like manner, a cross rate comparison conducted in the United Kingdom would exclude the British pound, but could involve comparing the rate of exchange between the Euro and the yen. Essentially, a cross rate can invo
