The Dubai Gold and Commodities Exchange (DGCX) on Friday unveiled its plans to add Chinese Yuan Futures to its offering, with the launch scheduled for December 2015, pending regulatory approvals.
The contract will be financially settled on the same day as offshore equity index futures, and will hold a value of USD 50,000. It will also give an outright quote on USD/CNY offshore FX rate, and will allow traders to settle in US Dollars. Intermarket trading will be available with other global exchanges that offer the contract, and will be tax free (that is, trades will be free of transaction tax and capital gains tax).
The USD/CNH futures contract will serve to respond to the growing needs for offshore currency risk management tools, such as hedging for trade financing flows and CNH deposits, risk overlay and hedging for foreign fund managers.
Gaurang Desai, CEO of the Dubai Gold & Commodities Exchange, said:
“The launch of this contract perfectly complements the development of DGCX as the region’s leading derivatives exchange. We are committed to providing the products that our participants want and are continuing with our ‘outside-in and inside-out’ approach, meaning we market regional products to global investors and global products to regional investors. We are providing a unique trading opportunity in the region to get involved in the Chinese currency market. Our participants are also able to trade DGCX commodities with Chinese Yuan exposure, and we believe this is a true advantage for our participants.”