8.5. What Is A Cross Rate? In the FX market all currencies are quoted against the USD in either a direct or reciprocal format. Due to the extensive nature of the activity in the FX market it is only logical that FX transactions do not always include the USD as one of the currencies involved, for example a Swiss company negotiating a deal with a South African company. In order to facilitate a deal such as the one used in the example the two currencies involved (of which the USD isn't one) need to be priced against one another using what is termed a cross rate. The transaction which necessitates the cross rate will be theoretically priced on the basis of two transactions against the USD. When quoting cross rates it is common practise to quote the stronger/larger currency as the base currency. For example when quoting a Pound-Euro cross rate, the EUR should be the base currency. Listed below are a few examples of cross rate quotes: EURGBP = 0.6845/50 GBPZAR = 12.9254/12.9650 EURZAR = 8.8209/8.8709 EURCHF 1.5664/68 USD USD -- EUR 0.7918/21 GBP CHF ZAR 0.5422/24 1.2412/16 7.0102/7.0302 EUR 1.2625/30 -- 0.6846/48 1.5670/81 8.8503/8.8791 GBP 1.4603/07 1.8438/42 2.2885/98 12.9254/12.9651 CHF ZAR 0.6377/82 0.8054/57 0.1422/26 0.4367/70 5.6461/5.6640 0.1126/29 0.0771/74 0.1766/71