••• home ••• docs ••• scripts •••
resources
- Investopedia | Forex & Currencies Trading
- Investopedia | Cross Currency
- Investopedia | Cross Currency Triangulation
- BabyPips | Safe Haven Currencies
Foreign exchange (forex) and currency trading refers to simultaneously buying one currency and selling another, or vice versa, in the hope that one currency will strengthen against the other.
A cross currency refers to a forex transaction that does not involve the U.S. dollar as a contract settlement currency. Common cross currency pairs involve the Euro and the Japanese yen.
The basic cross exchange rate formula
A/B x B/C = C/B
Examples
- EUR/GBP = EUR/USD divided by GBP/US
- GBP/CHF = GBP/USD x USD/CHF
- AUD/NZD bid = AUD/USD bid divided by NZD/USD offer = a certain rate
- AUD/NZD offer = AUD/USD offer divided by NZD/USD bid = a rate
Safe haven currencies are currencies that are expected to retain or increase in value during periods geopolitical macroeconomic stress.
The U.S. dollar (USD), along with the Japanese yen (JPY) and Swiss franc (CHF) are considered safe-haven currencies.