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Cross Rates

A cross rate is a currency pair that doesn't involve the USD or the EUR, such as GBP/JPY. Pairs that involve the EUR, such as EUR/JPY or GBP/EUR, are called euro crosses. There are literally hundreds of cross rates. Basically any nation, no matter how obscure, can trade against every other nation's currency. Obscure cross trades are often called “exotic,” and traders run the major risk of liquidity. With the increase in Forex trading in recent years, more crosses have been opened for retail trading. This trend will continue.


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