Online foreign exchange (forex) and contracts-for-difference (CFD) trading provider FXCM announced this Thursday that it has expanded its product offering to include forex baskets for retail clients.
A foreign exchange or forex basket is a mix of several currencies that all begin with the same equivalent value. Traders can then buy or sell a base currency against a mix of multiple currencies that are included in the basket. The value of the basket is dependent upon how the base currency performs against the other currencies in the basket since its inception.
Initially, FXCM is offering three different baskets – the Dollar Index Basket, the Yen Index Basket, and the Emerging Markets Index Basket. These will be available to the New York-headquartered broker’s retail customers globally.
Breaking down FXCM baskets
According to the statement released today, the Dollar Index basket, as the name suggests, has the US dollar (USD) against four majors – the British pound (GBP), Euro (EUR), Japanese yen (JPY) and Australian dollar (AUD).
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The Yen Index measures the value of the JPY against the AUD, GBP, EUR, and the Canadian dollar (CAD). The Emerging Markets Index uses the USD as its base currency and pairs it against the Chinese Renminbi (CNY), Mexican Peso (MXN), Turkish Lira (TRY), and South African Rand (ZAR).
Commenting on the new product, Brendan Callan, the Chief Executive Officer of FXCM, said: “Our customers typically trade different currencies at the same time to broaden their portfolio, diversify risk or hedge an existing position.”
“Trading a basket of currencies offers them an efficient way to trade against multiple currencies. This reduces the risk of exposure or adverse movements in a single currency and lowers trade costs.”
FXCM continues to expand its investment offering. In addition to expanding its forex offering, the broker continues to venture further into cryptocurrencies. As Finance Magnates reported, in May, the firm added CFDs on two new cryptocurrencies – Bitcoin Cash (BCH) and Ripple (XRP).