Calculating cross rates
If two different base rates exist against one common target currency, then you can calculate the conversion rate between these base rates.
The calculation of cross rates is based on this formula:
(rate A/B) = (rate A/C)/(rate B/C)This table shows an example how the cross rate for the EUR/GBP currency is calculated if the EUR/USD and GBP/USD currency rates exist:
| Currency | Calculation | Rates |
|---|---|---|
| EUR/USD | 0.9 | |
| GBP/USD | 1.45 | |
| EUR/GBP | 0.9/1.45 | 0.62 |
The cross rate for the EUR/GBP currency is the result of dividing the EUR/USD currency rate by the GBP/USD currency rate.