Cross currency pairs are currency pairs that do not include the US dollar. These pairs involve two currencies from different countries, such as EUR/GBP or AUD/JPY.
Cross pairs are important for traders who want to avoid the US dollar and directly trade between two other currencies. They offer more trading opportunities and allow traders to profit from price movements between different global economies.
For example, if you trade EUR/GBP, you’re speculating on the relationship between the euro and the British pound, without involving the US dollar. Cross pairs often have wider spreads than major pairs due to lower liquidity.
Test your knowledge of cross pairs in forex trading with the following questions:
