Every country has a currency whose value continually changes according to those of other countries. It depends on several factors, including the state of the economy, its foreign exchange reserves, supply and demand, central bank policies, and many more. The US Dollar is strong because of the strength of the US economy and the faith of investors. They prefer to hold more dollars against other currency, and according to the laws of demand and supply, demand and price are directly proportionate to each other.

Massive currency fluctuations can affect any economy. If the Rupee weakens against the US Dollar, imports will become costlier than exports. It will hurt importers but benefit exporters. Oil imports will become expensive and cause an increase in the prices of fuels like diesel and petrol. If the Rupee strengthens against the US Dollar, exports will become costly. It will affect sectors like information technology.

Currency futures are contracts for currencies specifying the price of exchanging one currency for another at a future date. They were introduced in 2008 on the National Stock Exchange (NSE) and other exchanges like the Bombay Stock Exchange (BSE), MCX-SX and United Stock Exchange.

Currency futures trading accounts can be set up with finance brokers by paying an initial margin which is the percentage of the total transactions carried out by the individual. The more significant the position, the higher will be the potential for profit and loss. They are available on the NSE in contract sizes of 1000 for most of the currencies.

China is the biggest consumer of zinc in the world. Zinc futures get traded on commodity exchanges like the London Metals Exchange (LME) and the New York Mercantile Exchange (NYMEX). They can be traded on the Multi-Commodity Exchange (MCX) in India. They are used by steel producers who hedge against changes in the rate of the material. This element is an essential commodity for them.

There is considerable scope for leverage in these futures because of low margins. But the risks are quite high. Zinc future price depends upon the fortunes of the economy all over the world, especially the steel sector. The producers can employ a short hedge to lock in a selling price. Businesses with a requirement for zinc can utilize a long hedge to secure a purchase price for the essential commodity.

Speculators also trade them. They assume the price risk that hedgers try to avoid in return for a chance to profit from favourable zinc price movement. They purchase it only when they believe that zinc prices will go up and sell them when assumed otherwise. Futures trading depends on the economic situation of the country.