Forex Cross Pairs


Its almost 8 months now….and Zerodha is yet to start the currency trading???? No one in Zerodha has got a clue as to when it is going to start. One more thing, currently I am checking realtime EUR/USD data on tradingview site.


In currency trading, traders often look for currency pairs with the highest pip values, as they are very useful for short-term strategies, such as day trading. The value of each pip depends on your lot size and the specific currency that you are trading. Pips can also be useful for calculating the amount of leverage that a trader can use when foreign currency trading.

FX Weekly: GDP, EUR/USD and Trade Levels – FXStreet

FX Weekly: GDP, EUR/USD and Trade Levels.

Posted: Mon, 23 Jan 2023 08:00:00 GMT [source]

Very often, some of these, so-called experts even recommend trading only one major currency pair, most often EURUSD getting the number one pick. Of retail investor accounts lose money when trading CFDs with this provider. There are many official currencies worldwide but not all currencies are traded actively in the forex market. Currencies backed by economically and politically stable nations or unions such as USD and EUR are traded actively. Also, the more liquid the currency, the more demand there is for that currency. For example, United States dollar is world’s most actively traded currency due to the size and strength of the United States economy and global acceptance of USD.

Minor ‘crosses’ include

One of the factors which determined this process was the so called «floating» politics which was accepted in the late 1960s. Before that, national currency rates were fixed, and the market law of supply and demand did not affect the price change. The first currency in the pair is called the base currency, while the second currency is called the quote or counter currency. The price of the base currency is always calculated in units of the quote currency. Japanese yen – Historically, the Japanese yen has proved on multiple occasions its ability to rise from the ashes of market volatility and uncertainty.

  • Consequently any person acting on it does so entirely at their own risk.
  • The value of the Hong Kong dollar is pegged to the US dollar in a unique system known as a linked exchanged rate.
  • A cross currency transaction, for example, doesn’t use the U.S. dollar as a contract settlement currency.
  • The American dollar is the most highly traded currency in the world.
  • It holds the euro as the base currency and the US dollar as the quote currency, so the price represents how many dollars you would need to spend in order to buy one euro.

A synthetic currency pair is created by trading two separate currency pairs in such a way as to effectively trade a third currency pair. Usually, USD is taken as intermediary currency to create any desirable synthetic cross currency pair. Research Optimus’s currency pair research services can help forex professionals, financial research specialists and currency arbitrage managers to reduce research costs and manage currency risks. Whether you need to get a second opinion about currency pairs to trade or evaluate currency pair trading, we can help. Contact ROP today to discuss our cost-effective currency pair analysis and research services.

At the same time, if you were to buy both currency pairs, you’ve contradicted yourself. For example, if you sell two negatively correlated pairs, chances are only one of the two trades will be successful. Although there are several others on the list, the only commodity currency pairs that you need to know for this lesson are USDCAD, AUDUSD, and NZDUSD. Minor currency pairs, on the other hand, make up a fraction of the crosses that are available for trading. This is one reason why I’m not an advocate of mastering one or two currency pairs at a time. In fact, making this mistake can quickly lead to forcing trades and overtrading.

Currency pairs of the major economies

By submitting this form, you are subject to the terms within our Privacy Statement. By submitting this form you are subject to the terms within our Privacy Statement. Margin requirements for USDTRY, EURTRY, USDZAR, USDMXN, USDDKK, USDNOK, USDSEK, USDSGD, USDCZK, USDHKD, USDHUF, EURPLN, USDPLN are 5 times higher.

affect the price

In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums. A forward exchange contract is a special type of foreign currency transaction. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Investopedia does not include all offers available in the marketplace. Find the approximate amount of currency units to buy or sell so you can control your maximum risk per position.

EUR/AUD: Euro/Australian dollar

The American is one of the top-traded worldwide currencies. This pair indicates the value of the U.S. dollar against the Hong Kong dollar, which is used in Hong Kong and Macau. The Hong Kong dollar is the ninth-most-traded currency across the globe and is pegged to the U.S. dollar, the most popular currency in the world.

However, if the American economy is doing better than the British economy, the reverse is true. The price displayed for a currency pair represents the amount of the quote currency you will need to spend in order to purchase one unit of the base currency. As with all currency pairs, the role of each country’s central bank shouldn’t be underestimated. In this case, the Reserve Bank of New Zealand sets interest rates that can have a major impact on NZD/USD, especially when they don’t line up with what the US Federal Reserve is doing. Commodity currencies are individual currencies or forex pairs in which the price is determined largely by the value of a certain commodity on which that currency’s economy is heavily dependent. GBP/USD has the pound as the base currency and the US dollar as the quote currency, meaning it shows how many dollars you’d need to spend to buy one pound.

USD/SGD: U.S. dollar/Singapore dollar

Using the U.S. dollars, they sell the currency for Canadian dollars. They will earn a profit from the arbitrage strategy if the amount they receive in Canadian dollars is more than what they initially bought. Cross currency swaps, which are contracts used to borrow money at a more favorable rate.

These are all things to take into consideration when trading on currency pairs. Make use of our news and analysis section on the platform, which is updated on a daily basis. It is wise to follow the latest news and economic announcements, such as changes to interest and inflation rates. A triangular arbitrage strategy would involve three different foreign exchange transactions with three different currencies. The first transaction will involve trading an initial currency with a second currency.

The forex market’s most actively traded currency pairs all include the U.S. Dollar, and those pairs tend to be where the greatest liquidity exists in the forex market. Nevertheless, many other currency pairs which do not involve the U.S. These are usually referred to as the cross currency pairs or just the crosses, and their quotes are called cross rates. This is because forex trading is simultaneously buying one currency and selling another. The currency pair itself can be thought of as a single unit, an instrument that is either bought or sold.

A top reason countries hold foreign currencies in reserve is to be able to buy food or military equipment on a moment’s notice with all sellers willing to take the reserve currency. The US dollar is the top reserve currency also because about 75% of world trade is denominated in dollars. The Minor Crosses, as the name implies, make up the less active cross currency pairs that generally do not have dedicated Interbank market makers or brokers. Buying and selling cross currencies provides an opportunity for bigger currency swings.

Leverage provided by a broker allows us to make the most of profits even from small currency fluctuations. Like with most other currency pairs, the strength of GBP/USD comes from the respective strength of the British and American economies. If the British economy is growing at a faster rate than that of America, it is likely the pound will strengthen against the dollar.

Not only does it help trades stay focused, but it also eliminates the risk of trading correlated pairs. ROP evaluates specific currency pairs that represent the best currency trading opportunities for matching client investment objectives. Our analysis identifies significant positive and negative developments are impacting currency pair strategies.

As we mentioned, there are three categories of currency pairs to trade in the Foreign Exchange market – those are major currency pairs, minor currency pairs, and exotic pairs. Minor currency pairs, or cross currency pairs, don’t include the U.S. dollar, which is the top traded currency across the globe. However, minor pairs do include at least one of the world’s three most-traded currencies—the British pound, the Japanese yen, and the euro. Research Optimus analyzes the most liquid and widely traded forex pairs such as EUR/USD , USD/JPY , GBP/USD and USD/CHF . Our team can also evaluate cross currency pairs that do not involve the US dollar and euro crosses that involve the euro currency.

Cross Currency Transaction

However, if you trade the exotics listed above, you may not have that luxury. Additionally, the technical analysis we like to use here at Daily Price Action is less reliable. As a general rule of thumb, the more liquid a market is, the more you can rely on the technicals. In other words, all minors are crosses, but not all crosses are minors. The majors are not the end all be all when it comes to trading Forex. Remember that a currency’s value depends on the currency sitting next to it.


Despite the small size of New Zealand, the small island nation has an abundance of natural resources. However, the country’s significant agricultural presence is what attracts the “commodity currency” label. So as you might expect, just like oil exports heavily influence the Canadian dollar, the Australian dollar is at the mercy of the country’s gold exports.

Crosses create more opportunities for traders by giving them more currencies to trade. FX position information is an important aspect of trading with IB that should be understood prior to executing transactions in a live account. IB’s trading software reflects FX positions in two different places both of which can be seen in the account window. For example, an order to buy 100,000 EUR.USD will serve to buy 100,000 EUR and sell the equivalent number of USD based on the displayed exchange rate. And if you aren’t familiar with these currency correlations, you can inadvertently double your risk. An example of two positively correlated pairs would be EURUSD and GBPUSD.

The Hong Kong dollar is allowed to fluctuate within a band of HK$7.75 to HK$7.85 to US$1, and traders can take advantage of any price movements within this band. Traders should keep an eye on the US-China trade war as any developments are likely to affect the price of this currency pair. In turn, expensive oil means that the Canadian dollar will likely strengthen due to the close ties between the Canadian dollar and the price of oil. Since oil is priced in US dollars on the world markets, Canada can earn a large supply of US dollars through its oil exports. As such, if the price of oil rises, it is likely that the value of the Canadian dollar will strengthen compared to the US dollar. On the world market would likely cause a reciprocal slump in the value of the Australian dollar.

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