In the context of foreign exchange, a cross currency denotes a pair of currencies that are exchanged directly against each other. For example, in the EUR/JPY cross currency pair, euros (EUR) are exchanged for Japanese yen (JPY) without needing U.S. dollars in the transaction. Cross currency pairs are important for traders, as they offer opportunities to diversify their trading strategies. With the increase in global trade, crossing currencies enables traders to capitalize on fluctuations in foreign exchange rates without the dollar's influence.