Is foreign currency trading permissible in Islam? I buy euros with dollars and sell the euro when the the price goes up.

بسم الله الرحمن الرحيم

(Fatwa: 212=214/B)

 

To exchange the currencies of a country with difference is not allowed. For example, to exchanging one dollar to two dollars, or giving one pound in exchange of two pounds is not allowed; since the currencies of a country are regarded as one jins (category/class). Yes, it will be right to exchange the currency of a country to the currency of another country with differences; since the currencies of different countries vary as per their standard, name, value and parts, so they will be considered as different categories and therefore exchanging them with difference will be allowed:

علة القدر مع الجنس فان وجدا حرم الفضل و النساء، وان عدما حلا ۔۔۔ (درمختار مع الشامي)

Allah knows Best!

Darul Ifta,
Darul Uloom Deoband