Cross pair

A cross pair is a currency pair where neither currency is the US Dollar. These pairs allow direct exchange between two non-USD currencies, such as EUR/JPY or AUD/CAD. Historically, trading these pairs involved two separate transactions through the US Dollar. Today, brokers calculate their rates dynamically from their respective major currency pairs, offering a direct quote.

For retail traders, cross pairs typically exhibit lower liquidity and wider spreads compared to major pairs. This translates to higher transaction costs, as the difference between the bid and ask price is greater. Reduced liquidity can also lead to increased slippage, particularly during rapid price movements or for larger position sizes, impacting the final execution price negatively.