DGCX kicks off trading in 3 new currency pairs

The Dubai Gold and Commodities Exchange (DGCX) yesterday commenced trading in three new currency pairs – the Australian dollar, the Canadian dollar and the Swiss franc – against the US dollar.

With this, the DGCX has emerged as the only exchange outside the US and Europe to offer six highly liquid currency pairs with a counter party risk protection in a regulated environment. The total number of currency pairs on the exchange stands at seven as it already has the euro, sterling pound, Japanese yen and Indian rupee against the US dollar on its platform.

The newly-launched currency products, along with the existing contracts, are expected to offer market participants a number of possibilities for hedging and investment. During the inaugural session, Australian dollar, Canadian dollar and the Swiss franc against the US dollar were trading at 84.93 cents per dollar, 97.04 cents and 88.22 cents per dollar at 5pm yesterday. The trading volume in DAUD was 57 lots, 52 lots in DCAD and 24 lots in DCH.

The new currency contracts are sized at CHF50,000, AUD50,000 and CAD50,000, with the contract price quoted in US dollars. The minimum price fluctuation will be $0.0001 per contract, equivalent to a tick value of $5 per contract. The first delivery month available for trading for all three contracts is September 2010.

"The aim of the new FX futures contracts is to build on the success of the existing currency portfolio and meet the growing demand from market participants. The DGCX will be the only futures exchange outside of the US and Europe to offer the six most liquid currency futures pairs," said Eric Hasham, Chief Executive Officer, DGCX.

"It's timely that the DGCX has introduced trading in CAD, AUD and CHF as there's increasing demand from the market players," said Pradeep Unni, Senior Financial Analyst at Richcomm Global Services, DMCC. "The response is good. Of course, volumes were not high on the first day of trading, but the market is very active as investors are showing interest in the new products. Retail investors were the first to come forward to trade."

Vinit Rasiwasia, Relationship Manager, Al Ameen Brokers, DMCC, said: "Not much trade but participation will come gradually."

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