﻿ Calculate cross exchange rates between three currencies - examples

# Calculate cross exchange rates between three currencies - examples

How can I calculate cross currency exchange rate between three currencies, for example when:

USD/EUR = 0.831

and

EUR/CHF = 1.104

What formula should I use to calculate cross exchange rate between USD and CHF ?
The calculation of cross exchange rates between three currencies is quite simple. To get the correct result, it is important to know, what does each currency pair represent. The first currency in currency pair is called base and the second one is called quote. The order of currencies in currency pair is important, because it indicates, the value of which currency do you have.

For example:
USD/EUR = 0.831 means 1 USD is equal to 0.831 EUR
EUR/CHF = 1.104 means 1 EUR is equal to 1.104 CHF

If you need to get the value of the second currency in a pair, you have to divide 1 by the exchange rate. For example, when USD/EUR = 0.831, then EUR/USD = 1 / 0.831 = 1.203

The example of cross exchange rate calculation:
USD/EUR = 0.831
EUR/CHF = 1.104

In case of this currency order, you have to multiply 0.831 and 1.104 to get the result.

USD/CHF = 0.831 x 1.104 = 0.917
Probably the simplest way how to calculate cross exchange rates between three currencies is:

1. Make sure the currencies in currency pairs are in correct order. If needed, you can put them in correct order by calculating of inverse exchange rate.

2. Multiply the exchange rates.
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