The Dubai Gold and Commodities Exchange (DGCX) is set to introduce three FX rolling futures contracts in a move it hopes will provide local traders greater access to international currency markets and give investors greater protection against FX volatility.
The new perpetual contracts which involve three currency pairs – euro, pound sterling and Australian dollar against the US dollar (USD) – will go live on July 6.
The perpetual aspect of the contracts means that they are automatically rolled over at the end of the trading day. The contracts will be priced in USD and denominated in amounts of 10,000 of the non-USD currency with block trades permissible.
“Not only do the contracts offer investors greater access to international currency markets with clear, understandable regulations, but the perpetual open nature of them will also provide them with unique opportunities to more efficiently hedge their risk exposure,” said Les Male, chief executive at DGCX.
“The contracts are suitable for all traders, but will offer especially great value to institutional investors, providing protection against swings in foreign exchange rates, particularly during this period of heightened volatility,” added Male.
The exchange also plans to roll out more additions to its futures FX contracts in the coming months, said Male.
The release follows the exchange’s recent accreditation from the European Securities and Market Authority (ESMA) as a third-country trading venue that meets the post-trade transparency requirements of the MiFID II and MiFIR regulations – a move that Male says aligns the exchange with international standards and instils greater confidence among investors.
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