Bidding for USD to analyze profits

Bidding for USD to analyze profits What is a foreign exchange cross rate? Foreign exchange-definition, cross exchange rate type, calculation procedure. How to conduct cross exchange rate transactions on foreign exchange, the advantages and disadvantages of cross exchange rates.
The ratio of the exchange rate of the two currencies depends on their exchange rate with the third currency. Since all currencies are quoted against the U.S. dollar in foreign exchange, the U.S. dollar is the third currency. Mount Joy In the foreign exchange market, the concept of cross exchange rates is a feature of currency pairs without the participation of the US dollar. The largest transaction volume has cross exchange rates between major hard currencies:,. The pound/yen and Swiss franc/yen are also sometimes actively traded. Foreign exchange is calculated through the main exchange rate against the US dollar (except for currency pairs). The analysis and prediction of currency cross exchange rates on foreign exchange are actually no different from the analysis of major currency pairs, but they have many peculiarities. First of all, you need to remember that the cross exchange rate is a secondary indicator. In any case, it depends on the US dollar exchange rate on foreign exchange, not only the economic conditions of the countries and the monetary policy of the central bank. Second, the analysis of currency cross exchange rate dynamics reveals the rate of change of the exchange rates of major currency pairs. For example, if the U.S. dollar is strong, the movement speed of the EUR/USD and USD/Swiss franc currency pairs will be different. It is difficult to see the speed difference by observing these currency pairs separately, but it is easy to see it by analyzing the cross exchange rate. The constant attention to foreign exchange cross rates is due to their increased volatility. Correctly analyzing the dynamics of the cross exchange rate can make your profits exceed the profits when trading with major currency pairs in the same time period. Until recently, there was a considerable drawback of cross exchange rate trading-the spread is too large, making the cross exchange rate unsuitable for certain trading strategies (intraday, scalping, etc.). However, at present, the spreads of most foreign exchange brokers are sufficient to accept cross exchange rates. Certain cross exchange rates lack large spreads that can be used to profit from transactions. Using the rebate service, a part of the returned spread is very important compared to the major currency pairs.

Use cross exchange rate analysis to trade major currency pairs. For example, the analysis of the cross exchange rate of the British pound against the Japanese yen indicates that its further growth will depreciate the yen against the British pound. You can use two positions in these currencies relative to the U.S. dollar to replace a long position in the GBP/JPY cross exchange rate, namely buying the British pound and selling the Japanese yen. Even if a transaction proves to be unprofitable, the profit of the second transaction will cover it according to the ratio of the cross exchange rate.

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