About Currency Crosses
Points to note:
• Foreign exchange rates quoted in pairs
• Major pairs, currencies in pairs with USD currency
• Cross pairs, unpaired currencies with USD
Rate Foreign Exchange, also known as Forex quoted abbreviation, uses two currencies in pairs. Most of these currency pairs are obtained from the G-8 currencies list. What is the G-8 list, in the next article we will discuss more deeply. But now let’s learn what Crosses currency is based on first.
Currency Cross Pairs
Major Pairs are one of the currencies of the G-8 list in pairs with USD currencies such as AUD / USD, EUR / USD, GBP / USD, NZD / USD etc. While for Cross pairs are all currency pairs that are not in pairs with USD currencies such as EUR / JPY, GBP / JPY, AUD / JPY, GBP / AUD, EUR / GBP etc. Cross currency was created to facilitate the process where forex traders can exchange money without using an International currency. Namely USD and not only make forex trade transactions between countries with other countries that do not use USD more simple. But also avoid the volatility of the USD currency itself the well-known are more sensitive to changes in market data around the world. Because the USD is an International currency and that is normal.
Another advantage in cross currency pair
Another advantage in cross currency pair that makes you more advised to try forex trading in cross pair. One of which is tend to have a strong trend. Again, tend to have a strong trend. That’s why many traders of investor types prefer cross pairs rather than major pairs.
One example of a strong trend in the cross currency can we take from the EUR / AUD pair. For 2013 EUR / AUD forex trading has a total movement of 3378 pips from the lowest price to the highest price. Wow, pips are very much not only in a year. Other cross currency pairs that have a high level of movement also occur in EUR / JPY, EUR / GBP, and GBP / JPY pairs. For example, again, let’s look at what the GBP / JPY pair’s daily range is. Almost 100-300 pips a day in one trending instead. That is cross pair, strong in terms of trending, but sometimes weak in terms of volatility.