Cross rates

[Ian Flanagan]

Hi all, I'm trying to calculate a cross currency price from two majors. I get close but not exactly.

The broker is variable spread.

E.G.

EURUSD bid:1.35000 ask:1.35002

GBPUSD bid:1.59290 ask:1.59297

EURGBP bid:0.84747 ask:0.84756

dividing the bids I get: 1.35000 / 1.59290 = 0.84751

dividing the asks I get: 1.35002 / 1.59297 = 0.84749

Is there a more subtle approach I should take to get closer answers?

[Alain Verleyen]

alladir:

Hi all, I'm trying to calculate a cross currency price from two majors. I get close but not exactly.

The broker is variable spread.

E.G.

EURUSD bid:1.35000 ask:1.35002

GBPUSD bid:1.59290 ask:1.59297

EURGBP bid:0.84747 ask:0.84756

dividing the bids I get: 1.35000 / 1.59290 = 0.84751

dividing the asks I get: 1.35002 / 1.59297 = 0.84749

Is there a more subtle approach I should take to get closer answers?

To sell EURGBP (bid), you have to sell EURUSD, and then to buy GPBUSD. So have to divide bid by ask:

EURGBP calculated bid : 1.35000 (bid) / 1.59297 (ask) = 0.84747

and reciprocally calculated ask : 1.35002 (ask) / 1.59290 (bid) = 0.84752

[Ian Flanagan]

excellent, thanks ^_^