What is Currency Trading In India?
The term ‘currency trading’ normally refers to the foreign exchange market or FOREX market – the market for trading currencies. As a matter of fact it is the largest market in the world already consisting of a trillion and as the investors continues to learn and get more interested about the market is also growing pretty rapidly. Like anywhere in the world, currency trading in India is not only the largest market in India, but it is also highly liquid – a quality that differentiates it from all other markets. NSE currency trading that takes place in the exchange involves buying one currency and selling another at the same time. In currency trading value of a particular currency is always determined by comparing it with another currency. The first currency in the pair is known as the ‘base currency’ and the second currency against whose value the value of the base currency is compared is known as the ‘counter currency’. In NSE currency trading, a currency pair shows how much base counter currency is actually required for purchasing a single unit of base currency. These pairs can actually be considered as a single init those can be bought or sold. Not only for currency trading in India, but also for other countries, currency prices are known to be affected by a range of political and of economic conditions. International trade, inflation, political stability and interest rate are only some of the most important factors those affect currency prices. Or it is also even possible for the governments to participate in of FOREX market in order to influence their currency values. This can actually be done in two ways – either by flooding the market with domestic currency in an attempt for lowering the price or alternatively buying foreign currency in order to raises the price. In India NSE currency trading aims at selling and purchasing large amount of currency so that it can actually leverage a shift in the relative value of different currencies in a profitable way. In India both BSE and NSE has started currency trading few months back. There is always a fluctuation and in currency value and primarily two reasons are there due to which the value of a particular currency does fluctuates. ‘Real market’ is the first reason where outside investors and visitors are forced to convert their currencies to that of the domestic currency in which they are doing business. Speculative nature of currency value fluctuation is the second reason. As investors tend to buy and sell currencies depending upon their stronger and weaker states, this is also the reason that speculations do often have a drastic consequence on national currency value and consequently also on the economy of the country. As experts speculate that currency trading in India is the next big thing in the finance market, and moreover as NSE currency trading can actually be more beneficial than equity trading a growing number of people is now finding currency trading a good choice.