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A cross rate is the currency exchange rate between two currencies, both of which are not
the official currencies of the country in which the exchange rate quote is given in. This
phrase is also sometimes used to refer to currency quotes which do not involve the U.S.
dollar, regardless of which country the quote is provided in.
Quote Currency
What is a 'Quote Currency'
A quote currency is the second currency quoted in a currency pair in forex. In
a direct quote, the quote currency is the foreign currency. In an indirect quote, the
quote currency is the domestic currency.
Also known as the "secondary currency" or "counter currency".
Currency Pair
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currency and receive the quote currency. The ask (sell price) for the currency pair
represents how much you will get in the quote currency for selling one unit of base currency.
For example, if the USD/EUR currency pair is quoted as being USD/EUR = 1.5 and you
purchase the pair, this means that for every 1.5 euros that you sell, you purchase (receive)
US$1. If you sold the currency pair, you would receive 1.5 euros for every US$1 you sell.
The inverse of the currency quote is EUR/USD, and the corresponding price would
be EUR/USD = 0.667, meaning that US$0.667 would buy 1 euro.
Currency Convertibility
What is 'Currency Convertibility'
Currency convertibility is the ease with which a country's currency can be
converted into gold or another currency. Convertibility is extremely important
for international commerce. When a currency in inconvertible, it poses a risk and
barrier to trade with foreigners who have no need for the domestic currency.
because the government would not be in a position to intervene in the foreign exchange
market (i.e. revalue, devalue) to support their own currency if and when necessary.