The Meaning of Cross Currency Triangulation for
Forex
The role of cross currency triangulation in forex trading lies in the fact that a
lot of currency crosses (that is, currency pairs that do not include US dollar as one
of their constituents) are not...
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The Meaning of Cross Currency Triangulation for
Forex
The role of cross currency triangulation in forex trading lies in the fact that a
lot of currency crosses (that is, currency pairs that do not include US dollar as one
of their constituents) are not traded directly against each other.
Many currency
crosses, for example EUR/GBP, GBP/JPY, and EUR/JPY have faced the
development over time since the introduction of euro and rearrangement of
currency market.
A very important thing about cross currency triangulation is that after euro
had been introduced, a mechanism of transacting business in Euros together with
letting money come back to their native currencies had to be developed.
In this respect, in 1997 triangulation was adopted as a rule of conducting
business in Eurozone via convertibility to three decimal places.
It means that to
convert a certain currency to another in terms of currency crosses, convention by
means of euro and round the euro amount to not less than three decim
Less
