ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What Is a Cross Rate? A cross rate is a foreign currency exchange transaction between two currencies that are both valued against a third currency. In the foreign currency exchange markets, the U.S. dollar is the currency that is usually used to establish the values of the pair being exchanged.

Detailed explanation-2: -The exchange rate is the price of one currency in terms of the other.

Detailed explanation-3: -What is a Cross Rate? A cross rate is a foreign exchange market quote between two currencies (not involving the U.S. dollar) that are then both valued against a third currency. If used as a base currency, the U.S. dollar is always seen to assume the value of one.

Detailed explanation-4: -A currency pair is the quotation of two different currencies, with the value of one currency being quoted against the other. The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency.

Detailed explanation-5: -Trading between two currencies happens in the foreign exchange market where one currency is weighed by putting it in pair with another currency. Any currency pair that doesn’t involve the dollar is considered a cross-currency pair, also known as currency crosses.