Including cross currencies in a trading or investment portfolio can offer several advantages that go beyond traditional major pairs like EUR/USD or GBP/USD. One of the primary benefits is diversification. Cross currencies provide exposure to economies outside of the US dollar, reducing over-reliance on a single reserve currency. This can help spread risk, especially during periods of dollar volatility.

Another advantage is the opportunity to capture unique trends. Cross pairs often display different price movements compared to USD-based pairs. For instance, trading EUR/JPY or AUD/NZD allows investors to take advantage of regional economic dynamics, central bank policies, or commodity-driven trends that might not be reflected in major pairs. This broadens the range of profitable opportunities.

Cross currencies can also serve as a hedge. If an investor holds assets in one currency, trading a cross that involves it can help manage exposure and reduce losses from unfavourable exchange rate shifts. For global businesses or investors with international holdings, this is especially useful.

In addition, cross pairs sometimes experience strong directional moves due to regional imbalances or interest rate differences, offering traders the chance to benefit from clearer trends. They can also provide lower correlation with other assets, strengthening portfolio resilience.

Finally, trading cross-currencies encourages deeper market knowledge. By analysing global economies beyond the dollar, traders develop a more comprehensive understanding of international finance. Overall, including cross currencies can enhance diversification, create new profit opportunities, and improve risk management in a balanced portfolio.