Cross currency refers to currency pairs that do not include the U.S. Dollar as one of the currencies. Also known as currency crosses or simply “crosses,” these pairs represent direct exchange rates between two non-USD currencies. Major crosses include EUR/GBP, EUR/JPY, GBP/JPY, and AUD/NZD.

Cross currency trading has grown significantly with electronic trading platforms making these pairs more accessible and liquid. These pairs often exhibit different volatility patterns and correlation relationships compared to major USD pairs. Traders use crosses to diversify currency exposure, trade regional economic themes, or exploit interest rate differentials between specific countries without USD exposure.

Real-world example: A trader expecting European economic outperformance versus Japan buys EUR/JPY at 130.00, profiting directly from Euro strength against Yen without U.S. Dollar influence.