Currency Crosses

After going through the School of Pipsology and doing a little demo trading, there's probably one thing you've noticed about trading currencies - it's all about the US Dollar! Or is it?

Well, with central banks across the world holding trillions in USD reserves, commodities priced in the Greenback, and other major financial transactions passing through the dollar daily, it pretty much IS all about the dollar.

In general, approximately 90% of all transactions in the almost US$2 trillion daily traded Foreign Exchange market involves the dollar. Wow!

Also, in your demo trading, I'm sure you've noticed that no matter what major pair you trade (i.e. EURUSD, AUDUSD, USDCHF, etc.) that US news pretty much dominates the movement regardless of data releases from anywhere else. So, why look at anything else besides the major currency pairs?

Well, serious trading opportunities can be found by following the other major currencies with currency crosses, especially if you want to avoid the unpredictable volatility that US dollar can bring.

Hopefully, this lesson will open up your outlook on Crosses and give you basic understanding on how to analyze them.

What is a Currency-Cross?

Basically, a currency-cross is any currency pair in which the US Dollar is neither the base nor counter currency. For example, GBPJPY, EURJPY, EURCAD, and AUDNZD are all considered currency crosses.