The concept of hard currencies refers to currencies that can be freely traded around the world and that are backed by strong domestic economies. For example, the currencies like the US Dollar, the Euro, the Pound and the Japanese Yen are examples of hard currencies as they are widely accepted and also traded. Let us now look at some popular currency pairs available for trading in the currency futures market.

In a currency pair, there are 2 distinct pieces viz. the base currency and the quotation currency. The base currency is always expressed as 1 unit. These currency pairs form the basis for currency trading in India. However, forex market trading hours on the currency futures exchange are limited while globally the currency market is a 24-hour market. To understand currency trading basics in India, you need to understand the quotation currency and base currency. In the rupee/dollar trade, the USD is normally the base currency and the INR is the quotation currency. So when we write USD 1 / INR. = Rs.67, then the USD is the base currency, the INR is the quotation currency and Rs.67 is the value. The base currency is always expressed in 1 unit. When it comes to trading, currency trades are slightly different from normal equity trades. Here is how!

In case of equities and even in case of commodities this is quite simple. However, in case of currency trading there are two currencies so how is the trading price decided? Most of us have seen the US dollar exchange rate represented as Rs.67/$. In technical parlance this is called a currency pair. So in the currency markets in India you effectively trade pairs. However, the currency market in India is still evolving.