Valencia, 29, hit .304 with eight home runs and 23 RBIs in 52 games last season with Baltimore. He also spent part of the season with Triple-A Norfolk, batting .286 with 14 homers and 51 RBIs in 65 games.
Lough, 27, a left-handed batter, was in 96 games for the Royals with a .286 average, five homers and 33 RBIs as a rookie. In 2012, he was a September callup from Triple-A Omaha and played in 20 games for Kansas City.
An important part of Valencia's statistical chart is his .371 (36-for-97) average against left-handed pitchers. Moustakas, a left-handed batter who hit .233 overall, was just 21-for-107 (.196) against lefties in 2013.
"We've always liked Danny's ability to hit, particularly against left-handed pitching, and he provides us some depth at third and first and just a good quality at-bat," Royals general manager Dayton Moore said.
The Royals also have switch-hitting Emilio Bonifacio as a possible third-base backup. Bonifacio became the team's projected super-utility player when Omar Infante was signed to play second base.
Valencia has not played first base in the Majors and just 28 times in the Minors, but Moore indicated he could back up left-handed-hitting Eric Hosmer, who had a breakout season in 2013.
"It's important to create as much depth as possible. It's a right-handed bat on the corners," Moore said. "He can play both corners and obviously Interleague Play is an important part of the season, and Danny gives us a chance to match up a little better."
Valencia broke in with the Twins in 2010 with a .311 average in 85 games and was their full-time third baseman in 2011, batting .246 with 15 homers, 28 doubles and 72 RBIs in 154 games. After a poor start in 2012, he was optioned to the Minors and later traded to the Red Sox. Last winter, he was purchased by the Orioles.
Lough's status with the Royals was in jeopardy after right fielder Norichika Aoki was obtained from the Brewers. Lough had spent his entire career in the KC organization, so the trade to Baltimore was unsettling.
"It was kind of a shock to me," Lough said.
Before the Aoki acquisition, Lough had been seen in a possible platoon in right field with Justin Maxwell, a right-handed hitter. Maxwell and Jarrod Dyson remain as potential backup outfielders.
"Once they did pick up Aoki, I knew it was going to be a crowded outfield. Aoki's a great player and he's going to definitely do well in that ballpark," Lough said.
A baseball and football player at Mercyhurst College in Erie, Pa., Lough was drafted in the 11th round of the 2007 First-Year Player Draft. In seven Minor League seasons, he played 677 games with a .297 average.
"I came up through the system and learned a lot," Lough said. "Not only did they teach me to be a better baseball player but a better person, and I can't thank Dayton and the Royals organization enough. I'm going to miss the guys but when a new opportunity arises, you've got to seize that opportunity, and that's what I'm going to try to do."
Lough said the Orioles indicated he'd get a shot at left field in Spring Training.
Valencia is a career .263 hitter in 335 Major League games. He has a .295 (18-for-61) average as a visiting player at Kauffman Stadium.
In August, Major League Baseball cleared Valencia of wrongdoing as it related to the league's investigation of Biogenesis, the South Florida firm accused of supplying banned substances to a number of players. Valencia's name had appeared in some published excerpts of Biogenesis founder Tony Bosch's records, but Valencia categorically denied any connection.
"He wasn't involved in it. If he was, he would've been suspended like everybody else. There was nothing to it," Moore said.
The Royals had been through a 105-game suspension that was levied against infielder Miguel Tejada last August for violation of MLB's Joint Drug and Prevention Program, so they checked into the Valencia situation.
"We looked into all that and made sure there was nothing to it," Moore said.