Cross Deal: FX trade between non-USD currencies explained
By Ken Chigbo, Founder, KenMacro. Published 2026-05-13.
Quick answer
A cross deal is a foreign exchange transaction between two currencies where neither is the US dollar. Examples include EUR/GBP, AUD/JPY, and GBP/CHF. Dealers traditionally priced crosses by combining two USD legs, which is why retail spreads on crosses tend to be wider than on major USD pairs.
What is cross deal?
A cross deal, often called a cross-currency trade or simply a cross, is any FX transaction that does not involve the US dollar on either side of the quote. Because the dollar dominates global FX turnover, most liquidity sits in USD pairs, and prices for non-dollar pairs were historically constructed by combining two dollar legs. For instance, EUR/GBP could be derived from EUR/USD and GBP/USD. Today many crosses trade directly in interbank markets, particularly EUR crosses, but the legacy term cross deal remains standard industry vocabulary to distinguish these trades from straight USD majors.
How traders use cross deal
Retail traders encounter cross deals constantly without realising it: EUR/GBP, EUR/JPY, GBP/AUD, AUD/NZD, and CHF/JPY are all crosses. The desk treats crosses as instruments with structurally wider spreads and lower depth than EUR/USD or USD/JPY, particularly outside the London and Tokyo overlap. Institutional desks use crosses to express relative-value views between two economies without taking dollar exposure: a trader bullish on the euro versus the pound can use EUR/GBP rather than running two separate USD positions. Carry traders often select crosses with wide interest rate differentials, such as AUD/JPY or NZD/JPY. Spread costs, swap charges, and slippage during illiquid hours weigh more heavily on crosses than on majors, which the desk factors into position sizing.
Common misconceptions about cross deals
The most frequent error is assuming all non-USD pairs are illiquid synthetic constructions. In reality, EUR/GBP, EUR/JPY, and EUR/CHF have deep direct interbank markets, with EUR/GBP being one of the most actively quoted crosses globally. A second misconception is that crosses always carry punitive spreads. Liquidity varies sharply: EUR crosses typically print tight spreads during London hours, while exotic crosses such as NOK/SEK or ZAR/JPY remain costly to trade. Finally, traders sometimes treat crosses as independent instruments, ignoring that price action is mathematically linked to the underlying USD legs, which still drives much of the short-term volatility.
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Frequently asked
What is the difference between a cross deal and a major pair?
A major pair always includes the US dollar, for example EUR/USD, GBP/USD, or USD/JPY. A cross deal excludes the dollar entirely, pairing two other currencies directly such as EUR/GBP or AUD/JPY. The practical difference shows up in liquidity and spread: majors dominate global FX turnover and offer the tightest pricing, while crosses typically trade at slightly wider spreads and can show thinner depth, particularly outside their home market sessions.
Why are spreads on cross deals usually wider?
Spreads reflect dealer hedging costs. When a market maker quotes a cross such as GBP/JPY, the hedge often involves two underlying USD trades, GBP/USD and USD/JPY, each carrying its own bid-ask cost. The dealer combines those costs and adds a margin, producing a wider quoted spread than either USD leg alone. Direct interbank liquidity in popular crosses like EUR/GBP narrows this gap, but most crosses still cost more to trade than the equivalent dollar pair.
Are cross deals suitable for beginner traders?
Beginners can trade crosses, but the desk generally points new traders toward EUR/USD or GBP/USD first. Crosses tend to be more volatile per session, react to two separate economic calendars rather than one, and carry higher spread and swap costs. Pairs like GBP/JPY and AUD/JPY are well known for sharp moves that can punish oversized positions. Building experience on a liquid major before adding crosses helps a trader understand how the underlying USD legs influence the cross price.
Which cross deals are the most actively traded?
EUR/GBP, EUR/JPY, and EUR/CHF dominate cross-deal turnover, supported by direct interbank markets and active corporate flow across Europe. GBP/JPY and AUD/JPY are heavily traded by speculative accounts and carry-focused funds. Beyond those, AUD/NZD, EUR/AUD, and GBP/AUD see regular institutional interest. Volumes drop sharply once you move into less common combinations such as NOK/SEK, ZAR/JPY, or MXN/JPY, where spreads widen and slippage during news events can be substantial.
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