Currency Pairs Traded in India

Currency Pairs Traded in India

Only 7 pairs of currency are traded in India, which include JPY/INR, USD/JPY, USD/INR, EUR/USD, EUR/INR, GBP/INR, and GBP/USD.

EUR-USD

The EUR-USD currency pair is one of the most popular pairs traded in India’s foreign exchange market. The pair represents the exchange rate between the Euro, the official currency of the Eurozone, and the US dollar, the world’s primary reserve currency. This currency pair accounts for about 25% of the daily trading volume in the global foreign exchange market.

Trading Strategies for EUR-USD

Traders in India can use several trading strategies when trading the EUR-USD currency pair. Here are some popular strategies:

  • Technical Analysis: Technical analysis involves analyzing charts and identifying patterns to predict future price movements. Traders can use technical indicators such as Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) to identify entry and exit points for their trades.
  • Fundamental Analysis: Fundamental analysis involves analyzing economic data and news events to predict future price movements. Traders can use news feeds and economic calendars to stay updated on relevant events.
  • Carry Trade: Carry trade involves borrowing a low-interest-rate currency and investing in a higher-interest-rate currency. For example, traders can borrow in the Euro, which has a lower interest rate, and invest in the US dollar, which has a higher interest rate.

USD-JPY

The USD-JPY currency pair represents the exchange rate between the US dollar and the Japanese yen. This currency pair is the second-most-traded currency pair globally, accounting for around 18% of the daily trading volume in the foreign exchange market. 

Trading Strategies for USD-JPY

Traders in India can use several trading strategies when trading the USD-JPY currency pair. Here are some popular strategies:

  • Breakout Trading: Breakout trading involves identifying key levels of support and resistance on the price chart and entering a trade when the price breaks out of these levels. Traders can use technical indicators such as Bollinger Bands and the Average True Range (ATR) to identify potential breakout opportunities.
  • Carry Trade: Carry trade involves borrowing a low-interest-rate currency and investing in a higher-interest-rate currency. For example, traders can borrow in the yen, which has a lower interest rate, and invest in the US dollar, which has a higher interest rate.
  • News Trading: News trading involves trading based on significant news events. Traders can use economic calendars and news feeds to stay updated on relevant events and enter trades based on the market’s reaction to the news.

GBP-USD

The GBP-USD currency pair represents the exchange rate between the British pound sterling and the US dollar. It is one of the most widely traded currency pairs in the foreign exchange market, accounting for around 14% of the daily trading volume. 

Trading Strategies for GBP-USD

Traders in India can use several trading strategies when trading the GBP-USD currency pair. Here are some popular strategies:

  • Trend Following: Trend following involves identifying the direction of the trend and entering a trade in the same direction. Traders can use technical indicators such as moving averages and the Relative Strength Index (RSI) to identify potential trend reversals and entry points.
  • News Trading: News trading involves trading based on significant news events. Traders can use economic calendars and news feeds to stay updated on relevant events and enter trades based on the market’s reaction to the news.
  • Range Trading: Range trading involves identifying key levels of support and resistance on the price chart and entering a trade when the price reaches these levels. Traders can use technical indicators such as Bollinger Bands and the Average True Range (ATR) to identify potential range-bound markets and entry points.

Quick Summary

  • Currency trading in India is a popular investment option for those looking to diversify their portfolios and make profits from fluctuating exchange rates.
  • Some benefits of currency trading include high liquidity, leverage opportunities, and the ability to trade 24/7.
  • Some commonly traded currency pairs in India include USD/INR, EUR/INR, GBP/INR, JPY/INR, and AUD/INR.
  • The most commonly traded currencies in India include the US dollar, Euro, Japanese yen, and British pound.
  • The exchange rate of EUR-USD, USD-JPY, and GBP-USD can fluctuate depending on the economic conditions, geopolitical influence, and state of affairs of both countries. 
  • The best time for forex trading in India is during overlapping market hours between major financial centers such as London, New York, and Tokyo. 

Frequently Asked Questions

1. What is Currency pairs traded?

Currency pairs traded refer to the exchange rate relationship between two currencies in the foreign exchange market, such as USD/EUR or JPY/GBP.

2. How many pairs are traded in Indian currency?

Four pairs are actively traded in Indian currency – USD/INR, EUR/INR, GBP/INR, and JPY/INR. However, USD/INR is the most popularly traded pair, accounting for a significant portion of the trading volume in the Indian forex market.

3. What are the 7 major currency pairs?

The 7 major currency pairs, also known as the “majors,” are the most widely traded and liquid in the world. They are:

  • EUR/USD (euro/US dollar)
  • USD/JPY (US dollar/Japanese yen)
  • GBP/USD (British pound/US dollar)
  • USD/CHF (US dollar/Swiss franc)
  • USD/CAD (US dollar/Canadian dollar)
  • AUD/USD (Australian dollar/US dollar)
  • NZD/USD (New Zealand dollar/US dollar)

Yes, currency pair trading is legal in India. The Reserve Bank of India (RBI) regulates currency trading in India, and individuals can trade in the currency derivatives segment of recognized stock exchanges under the guidelines provided by the RBI. 

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