Posted by forex at 8:54 AM
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1. Review the five 'major' crosses that are used to determine cross currencies. They are:
EUR/USD (euro/U.S. dollar)
GBP/USD (Great British Pound/U.S. dollar)
USD/CHF (U.S. dollar/Swiss franc)
USD/JPY (U.S dollar/Japanese Yen)
AUD/USD (Australian dollar/U.S. dollar)
2. Determine the rates for the two currencies you want to calculate a cross currency rate for. Let's say you want to calculate a cross rate for the EUR/CHF and the current quote for EUR and CHF is:
EUR/USD = 1.2060
USD/CHF = 1.5080
3. Calculate the currency cross. Multiply the first currency in the pair by the second currency in the pair. For instance, the EUR/CHF cross is calculated by multiplying the currency rate for EUR by the currency rate for CHF. The calculation is: 1.2060 x 1.5080 = 1.8186.