How the Yen and Euro Crosses works in Trading After the U.S. dollar, the euro and yen are the most traded currencies. And like the U.S. dollar, the euro and yen are also held as reserve currencies by different countries. So this makes the euro and yen crosses the most liquid outside of the U.S. dollar-based “majors.”

Synthetic Currency Pair How You Probably Shouldn’t Sometimes institutional forex traders can’t trade certain currency crosses because they trade in such large sizes that there isn’t enough liquidity to execute their order. In order to execute their desired trade, they have to create a “synthetic pair“. How to Create a Synthetic Currency Pair Let’s say

How fundamentally trading works with currencies crosses If strong economic data comes out of Australia, you might want to look at buying the AUD. Your first reaction might be to buy AUD/USD. But what if at the same time, recent data also show the United States experiencing strong economic growth? The price action of AUD/USD may be flat.

Be Careful Trading Obscure Currency Crosses While the euro and yen crosses are the most liquid crosses, more currency crosses exist that don’t even include the U.S. dollar, euro, or the yen!We’ll call these the “Obscure Currency Crosses”! If we were in school – come to think of it, we actually are in school! –

Trade Interest Rate Differentials By selling currencies whose country has a lower interest rate against currencies whose country has a higher interest rate, you can profit from the interest rate differential (known as a carry trade) as well as price appreciation. That’s like being able to get a frosted cupcake with sprinkles on top! That talks to you!