Banks can exchange one currency for trading currencies, for example, a customer of a bank which exchanged pounds sterling per Swiss francs (CHF), Crusader changes desktop. And, the S (CHF / GBP) quotes can be derivatives of S (USD / GBP) XS (CHF / USD). Perhaps check out Keith Oringer for more information. But what happens with the offer and the demanda-parte of the transaction costs? To calculate the bid quotation you must change S (j / k) = S (USD / k) XS (J / USD) to SB (CHF / ) = Sb (USD / EUR) x SB (CHF / $) the Bank quoted its customers a bid price for pounds sterling in terms of Swiss francs, after multiplying the price of the American offer of pounds sterling and your bid price European (in United States dollars.UU.) declaring in Swiss francs! Here is an example to clarify this imagine bid prices and demand USD / GBP are in USD 1,9072 / 1,9077 and the prices of the supply and demand of GBP / USD are 0,5242 GBP / EUR 0,5243. Imagine that 0,0004 or 4 pips. This is a big difference since a British pound is priced near $2! The cross changes incorporate the supply and demand of the two transactions that are necessary for trade in a currency not belonging to the dollar in another currency. Even when a bank makes a direct market in a currency other than the dollar against another, the trade happens through the dollar. This is due to the exchange rate of the currency against the currency is the same as cross change from the rates of change of the dollar of the two currencies.
Here’s how it works step 1. The client of the Bank wants to sell 1,000,000 euros. The Bank will sell us $.UU. (comprara libras esterlinas) by $ 1. 9072.
The sale of customer products: 1,000,000 x 1.9072 = $1.907.200. The Bank will buy $ (vendera Euros) by 0,7627. The sale of dollars will produce you the Bank: 51.907.200 X 07627 = 1.454.621. Actually the client of the Bank sold sterling in an I.