Cross rates explained: how EUR/GBP and EUR/JPY are calculated from dollar pairs
A cross rate is an exchange rate between two currencies that doesn't include the US dollar. How cross rates are derived from dollar pairs, with worked examples, and why crosses often cost more to trade.
Most currency trading happens against the US dollar: in April 2025, all ten of the most traded pairs included it, according to the BIS. A cross rate is a price between two currencies that doesn't include the dollar, such as EUR/GBP, EUR/JPY or AUD/NZD.
Calculating a cross from two dollar pairs
The method depends on where the dollar sits in each pair. All prices below are hypothetical.
The dollar is the quote currency in both pairs
EUR/USD = 1.1050 and GBP/USD = 1.3000.
EUR/GBP = EUR/USD ÷ GBP/USD = 1.1050 ÷ 1.3000 = 0.8500. One euro costs 0.85 pounds.
The dollar is the quote in one pair and the base in the other
EUR/USD = 1.1050 and USD/JPY = 147.20.
EUR/JPY = EUR/USD × USD/JPY = 1.1050 × 147.20 = 162.66.
The dollar is the base currency in both pairs
USD/CAD = 1.3800 and USD/JPY = 147.20.
CAD/JPY = USD/JPY ÷ USD/CAD = 147.20 ÷ 1.3800 = 106.67.
A quick check: the dollar should cancel out. In EUR/USD × USD/JPY, the dollars cancel and you're left with EUR/JPY.
Bid and ask on a cross
Building a cross from two dollar pairs means paying the spread on both. To sell EUR/GBP that way, you'd sell EUR/USD at its bid and buy GBP/USD at its ask, which gives a lower price than using mid prices. That's one reason crosses usually have wider spreads than the major dollar pairs. Pairs like EUR/GBP and EUR/JPY trade directly in large volumes, but less traded crosses are often still priced through the dollar.
Why traders use crosses
- To isolate a view. If you expect the euro to outperform sterling but have no view on the dollar, EUR/GBP expresses that directly.
- To reduce exposure to US news. A cross can be less sensitive to US data, though it still reacts through both of its underlying rates.
- For different behaviour. GBP/JPY, for example, is known for a wide daily range (currency pair nicknames).
A cross still carries the combined risk of two currencies, and how closely they move together affects its volatility (currency correlation). Live prices: EUR/GBP, EUR/JPY and GBP/JPY.
Sources
Common questions
What is a cross rate in forex?
An exchange rate between two currencies that doesn't include the US dollar, such as EUR/GBP, EUR/JPY or AUD/NZD.
How do you calculate EUR/GBP from EUR/USD and GBP/USD?
Divide EUR/USD by GBP/USD. With EUR/USD at 1.1050 and GBP/USD at 1.3000, EUR/GBP is 0.8500.
Why do cross pairs have wider spreads?
Many crosses trade less than the major dollar pairs, and when a cross is priced from two dollar pairs, the spreads of both are combined.
This article is for information only and is not financial advice. Trading forex and CFDs carries a high risk of losing money. Read the risk warning. Spotted an error? Tell the editors.
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