What is the primary purpose of calculating cross exchange rates?

Calculating cross exchange rates primarily serves to determine the exchange rate between two non-dollar currencies. This is essential for currency traders and businesses engaged in international transactions where neither currency involved is the US dollar. By determining the cross exchange rates, individuals and organizations can make informed decisions regarding foreign exchange dealings, pricing of goods and services in different countries, and investment strategies in different currency markets.

While understanding the relationships between non-dollar currencies is valuable, this calculation does not focus on dollar currencies specifically or directly address inflation rates or government monetary policies. Instead, it allows for the identification of the relative value of one currency against another, facilitating smoother transactions and investments in the global market.