Crosses - is a phenomenon that belongs to the category of operations on foreign exchange gained currency in the Forex market.It is interesting that this phenomenon involves transactions with currency pairs, in which the dollar is not listed as a basic priority or currencies.
General description
Since the Forex market the majority of currency transactions made with the dollar, the cross-rates - a prerogative of the traders who have a very impressive experience in trading, complex knowledge of micro- and macro-economic situation in the country, whosecurrency participating in the auction.But the dollar is also often involved in such type of trading.
Among the most popular types of cross-rates decided to allocate the following:
- the yen and the Swiss franc;
- the pound sterling and the Canadian dollar.
For these couples not apply the principle of reverse and forward currency rates.
Generally, the Forex market there are three major currency quotes:
- Described here cross-quotation.
- Direct - a unit of existing foreign currency displayed in US dollars.It is usually prescribed as: JPY / USD (in the first pair of interest is the currency of a foreign state).
- Contact - a unit of the US dollar, expressed in the currency of a foreign state.It is similar to a prescribed direct quotation, but in a couple of dollar is worth in the first place: USD \ EUR.
cross-rate dollar and the euro.Currency converter
Recently, the dollar and the euro have become permanent members of the cross-rates for most world currencies, it is difficult to underestimate the importance of their calculations.In this case, the cross-rates - it is an opportunity for trading, and it is calculated in three ways, when it comes to the dollar.They should be considered:
- There is an importer with a partner from Hong Kong.The dealer is required to calculate the operations based on the quotation and the Hong Kong dollar and the ruble.In the market of such operations are not listed, so as a way out here could provide a dollar cross-rate.And then the scheme is quite simple: buy rubles, they exchanged for dollars and then to US dollars on the Hong Kong exchange.Then use once a couple of courses.
- indirect method.At the same time the dollar is the cross-currency for a currency pair, for example, of a pair of the ruble and the pound sterling it relates to the second.The operation is done by multiplying the dollar rate of the two currencies against each other.
- specific method assumes that the dollar currency applies to both of the pair, so the calculation need to share one second.
Calculations for the euro
Here there is a similarity with dollar estimates, but with some differences.However, there is a simplified schematic, often used by dealers.It included the following:
- Finding the average for the sale and purchase of each of the currencies against the euro.
- is determined by calculating the current average cross rate of the euro.
- The average value of the euro expanded in two opposite directions for fixing the value of the spread.And it allows you to get the value of the course and the purchase and sale under cross-rate euro.
value
Formation of a particular type of instrument, such as a cross-training - it is not a spontaneous decision.In reality, the operation in which the dollar is not a priority, have a whole set of advantages to using.To understand this, it takes a little aside the principles of Forex Currency Exchange as an international structure, and consider the benefits of this tool for individual financial institutions and corporations involved in trading outside of their state.
for the success of the economic analysis is very important to know about the state of the market of oil, gas and industrial raw materials.The priority in the management of currency nternational cooperation is the US dollar.This is understandable, because, despite the current situation, the most economically developed country is considered to be the United States.But the dollar are periodical fluctuations.That is why the most correct conduct transactions involving currencies of other states, where the economy is more stable at the time of the auction.That is why the cross-rate of the ruble is becoming increasingly popular.
certain nuances use
For right choice of tool is required to examine the economic situation of the country, and this has traditionally used a system of currency indices.This method is universal, as the number of transactions made cross is still at a relatively modest level.This is particularly true of certain exotic currencies.
Conclusions
Crosses - is a type of operation that is perfect for time zones, as well as a high degree of efficiency of implementation of exchange rates.This tool is of great importance for the commercial and industrial sectors of the economy, as the smaller number of opponents involved in such transactions, the better.
