What is Cross Currency Pair? - Definition & Explanation

Definition

A currency pair that does not include the US dollar (e.g., EUR/GBP).

Cross Currency Pair Explained

A cross currency pair does not include the US dollar. Examples: EUR/GBP, EUR/JPY, GBP/JPY. Crosses typically have wider spreads than major pairs.

Currency Pair

Two currencies quoted together showing their exchange rate (e.g., EUR/USD).

Exotic Pair

A currency pair that includes one major currency and one from an emerging economy.

Crosses are calculated from two major pairs, adding cost. Lower liquidity also contributes to wider spreads.