Clusd currency pair
Family I · Instruments
Not to be confused with forex currency trading, major currency pairs, exotic currency pairs.
Clusd currency pair is not a standard market term; it appears to be a misspelling or truncation of a currency pair that is eligible for settlement through CLS (Continuous Linked Settlement). CLS is a payment-versus-payment settlement system used by member banks for a defined list of currencies and currency pairs. The term does not denote a distinct class of instrument; it refers to the settlement eligibility of a pair rather than its trading characteristics.
What CLS eligibility means for a pair
CLS settlement is available only for pairs where both currencies are on the system's eligible currency list. That list is maintained by CLS and has expanded over time; it is not fixed by any single regulator or broker. A pair such as EUR/USD or USD/JPY is typically eligible, while many emerging-market pairs are not.
Eligibility affects how a trade is settled, not how it is quoted or traded. A pair can be actively traded in the interbank market without being CLS-settled, in which case settlement occurs through correspondent banking or other arrangements.
Worked example: settlement value and eligibility
Suppose a bank trades 10,000,000 EUR against USD at 1.0850. If the pair is CLS-eligible, both legs are settled simultaneously through CLS on the value date, reducing principal risk. If it is not eligible, the two legs settle separately.
Why the term is ambiguous
The string "clusd" does not correspond to a recognised currency code or pair symbol. Currency codes are defined by ISO 4217; "CLS" is not a currency. Traders encountering "clusd" should verify whether it is a typo for a standard pair such as USD/CLP, USD/CAD or EUR/USD, or a reference to CLS settlement eligibility. No broker or platform quotes a pair called "clusd".
Often confused with
- forex currency trading
- Forex currency trading is the activity of buying and selling currencies, whereas a clusd currency pair is a settlement-eligibility label for a pair; the visible sign is that trading refers to transactions, not to a pair's settlement status.
- major currency pairs
- Major currency pairs are the most liquid pairs, typically involving the US dollar, while a clusd currency pair concerns CLS settlement eligibility; the visible sign is that major pairs are defined by liquidity, not by settlement system membership.
- exotic currency pairs
- Exotic currency pairs involve a major currency and a currency from a smaller or emerging market, while a clusd currency pair is defined by CLS eligibility; the visible sign is that exotics are usually not CLS-eligible, whereas clusd pairs are.