Basics of Currency and Exchange Rate

What is Currency? 

Currency is a channel for exchange of goods and services. In short, it is money, in the form of paper or coins, usually issued by the government and is generally accepted at the value as a payment method. The currency is the main media exchange in the modern world, has long replaced Barter as a means of trading goods and services. The new form of currency has entered the vocabulary, virtual currency. Virtual currencies such as Bitcoin have no physical existence or government support and traded and stored in electronic form.

National currency 

According to Worldatlas.com, 180 national currencies recognized by the United Nations are currently circulating. 66 other countries use US dollars or their currency pegs directly to the dollar. Most countries issue their own currencies. For example, the official Swiss currency is a Swiss franc, and Japan is a yen. Exceptions are euros, which have been adopted by most countries which are members of the European Union.

The foreign exchange is the request where currency dyads are traded. Currencies always trade in dyads, similar as the INR/ USD, and dealers make positions grounded on their supposition of price changes. Currency price changes are measured in pips, which dealers use to establish tradepositions.The Rupee is represented by INR, the U.S. bone is USD, so the Rupee/U.S. bone brace is shown as INR/ USD. Other generally traded currency symbols include AUD (Australian bone), GBP (British pound), CHF (Swiss franc), CAD (Canadian bone), NZD (New Zealand bone), and JPY (Japanese yearning). 

Each forex brace will have a request price associated with it. The price refers to how important of the alternate currency it takes to buy one unit of the first currency. In forex, the base currency represents how important of the quotation currency is demanded for you to get one unit of the base currency. For illustration, if you were looking at the INR/ USD currency brace, the Indian Rupee would be the base currency and the U.S. bone would be the quotation currency. If the price of the INR/ USD currency brace is0.01311, this means it costs0.01311U.S. bones to buy one Indian Rupee or vice versa 1 USD = 76.3003 INR. 

Numerous currency dyads move about 50 to 100 pips per day ( occasionally more or less depending on overall request conditions). A pip (Percentage in Point) is the name used to indicate the 4th numeric place in a currency brace, or the alternate decimal place when JPY is in the brace. Pip represents the smallest whole unit of movement in a currency pair's exchange rate. If INR/ EUR moves from 1.1040 to1.1043, that .0003 EUR rise in value is 3PIP.A pip is generally the last decimal place of a price quotation. Utmost dyads go out to 4 decimal places, but there are some exceptions like Japanese yearning dyads (they go out to two decimal places). For illustration, for INR/ USD, it's0.0003, and for USD/ JPY, it's0.03. 

 INR / 1 USD : 76.2091 

INR / 1 GBP : 99.5296 

INR / 1 EUR : 82.7824 

INR / 100 JPY : 59.4800