Hard Currency

Hard Currency

A currency in which investors have confidence, such as that of an economically and politically stable country. Hard currencies serve as means of payment settlements because they do not suffer from sharp exchange rate fluctuations. Large, international transactions are often settled in one hard currency or other. The market to buy and sell hard currencies is especially liquid, even by the standards of foreign exchange trading. The price of a hard currency often remains stable in the short-term. Examples of hard currencies include the U.S. dollar, the British pound, the euro, and the Japanese yen.