Cross course

This article treats the cross exchange rate as a special exchange rate in economics. For the cross course in sailing, see Crossing (sailing) and turning (sailing) .

A cross rate (also Cross Rate or cross rate of English cross rate , wrongly as a cross rate or Cross rate hereinafter) is an exchange rate of two currencies , which is determined using the current exchange rates to a third currency. More generally, any exchange rate between two foreign currencies can also be referred to as a cross rate.

If there is no official exchange rate between two currencies, then the determination of cross rates is necessary. A bid-ask spread between the two currencies can also be determined using the bid-ask spreads for the third currency.

example

The EUR / CHF cross rate is calculated from the EUR / USD and CHF / USD bilateral exchange rates .

Simple variant:

• CHF / USD = 1.0241 - for 1.0241CHF you get 1 USD
• EUR / USD = 1.1116 - for 1.1116 EUR you get 1 USD

Then the cross rate is EUR / CHF = , so for 1 CHF you get around 1.0854 EUR. ${\displaystyle {\tfrac {1{,}1116}{1{,}0241}}\approx 1{,}0854}$

More precise variant:

Since exchanging between currencies across the spread between the bid and ask rates is associated with costs, a distinction must be made between bid and ask rates when determining cross rates. We assume that the following bid and ask prices are given:

• CHF / USD: money 1.0221, ask 1.0261
• EUR / USD: bid 1.1106, ask 1.1126

From this we derive the cross rates (bid and ask) for EUR / CHF as follows:

• EUR / CHF (money) = ${\displaystyle {\tfrac {\text{EUR/USD (Geld)}}{\text{CHF/USD (Brief)}}}={\tfrac {1{,}1106}{1{,}0261}}\approx 1{,}0824}$
• EUR / CHF (letter) = . ${\displaystyle {\tfrac {\text{EUR/USD (Brief)}}{\text{CHF/USD (Geld)}}}={\tfrac {1{,}1126}{1{,}0221}}\approx 1{,}0885}$

See also

• Triangular arbitrage

Individual evidence

1. ↑ Cross course . Entry atwirtschaftslexikon24.com. Retrieved May 3, 2017.
2. ^ Frank Geßner: Cross Rate. In: Gabler Wirtschaftslexikon. Retrieved May 3, 2017 . 
3. ↑ Cross rates - calculate easily and quickly. In: fxmarkets.de. Retrieved May 3, 2017 .