The forex market is undoubtedly interesting and full of many opportunities that can make or break your trading career. Take currency pairs; there are 28 major currencies, as well as several significant currency pairs favoured by many traders. However, that is not to say that you cannot find opportunities outside these pairs. For instance, the Indian economy is doing quite well, and the rupee presents excellent prospects when paired with suitable currencies.
How Are Currency Pairs Traded?
Currencies trading pairs come in standardised packages known as lots, of which there are three. The first and the smallest is the mini lot, which is 1,000 units. The second is the medium lot, 10,000 units, and the last is the standard lot, made up of 100,000 units. Furthermore, gains or losses are calculated by pips, then multiplied by the lot size you were trading to get the total amount.
This piece will explore the best currencies to trade the INR against and explain why we think the pairs are ideal. We’ve also put together a trading guide list of forex brokers to help you pick the best in the Uk.
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USD/INR
The dynamics between India and the US are interesting, to say the least. India’s inflation rate has fallen to the sixth percentile, which shows excellent performance from the rupee, while analysts fear the US will crack the double-digit numbers. Furthermore, as India bolsters its manufacturing sectors, the trade imbalance between the two countries is starting to level out, creating some welcomed tug of war.
These factors and many more make the USD/INR an exciting currency pair to watch out for in the short and long term. The two countries’ trade relations will continue to strengthen as the US pivots from China’s manufacturing to places like India and more of the Indian population join the middle class.
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GBP/INR
Since Great Britain left the European Union, it has had to negotiate trade deals with its trade partners, and India is one of the most important. The UK exports leather products, textiles, food, machines, and its services to India, while it exports flowers, electrical appliances, precious stones, and nuclear reactors. This means the two economies have a great need for each other and that there will be continued demand for rupees and pounds on both sides of the aisle.
The pound has also experienced some volatility in recent months, which has led to it trading at par with the dollar, creating opportunities for forex traders. However, as that situation continues, don’t forget other exotic pairs, such as the rupee and the pound. The pair holds great potential as the pound finds its new place in the market and India grows into a powerhouse in the Asian market.
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EUR/INR
The EU is India’s third-largest trading partner, and it accounted for 10.8% of the country’s trade volume in 2021, making the block an essential element of India’s continued prosperity. On the other hand, India is not so badly off as it is the EU’s tenth most crucial trading partner, accounting for 2.1% of its trade volume. As such, the euro and the rupee will continue to be in demand in both regions, and the supply of the currencies will make for exciting trades.
Another interesting fact about the EU and India’s trade relations is that the trade in services between the two has reached an all-time high of £30 billion. This also means more interactions between Indians and Europeans, and the need to exchange between the two currencies has never been higher. Creating volatility and excellent opportunities to trade the two.
Conclusion
The forex market is like a great tug of war. Currency pairs are the teams on either side of the rope, while trade imbalances, government policies, and inflation rates are the force they pull by. Forex traders are the spectators who place bets on which team will win and enjoy a fantastic match between the two. Furthermore, when it comes to putting on a good match, none other has been doing it as well as the Indian rupee.
India is well on its way to eradicating some of its significant problems and has grown its economy at a healthy rate. It has also proven that it can handle its fair share of trade, and the rupee pair will continue to be an excellent choice for forex traders.
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