US-based Boston Technologies, a provider of technology and trading solutions for financial markets’ firms, has joined the growing list of service providers offering a tradable price on the Chinese yuan. Boston Technologies will offer the emerging market currency pair on the popular MetaTrader 4 platform.
Boston Prime, the prime brokerage unit of Boston Technologies will provide liquidity to firms using services offered under the Boston Technologies banner. The Hong Kong-based contract, CNH, an offshore equivalent to the main currency will be offered against the greenback, the currency code is USD/CNH. Boson Technologies has seen a growing demand from clients in the region, hence the product extension.
Chinese policy makers have been gradually liberalising the status of the yuan, with initiatives such as the widening of the daily benchmark rate opening up the market. Furthermore, with China overtaking Japan as the world’s second largest economy, there is an increased need for firms to manage their exposure in the yuan.
The yuan is growing in significance as a global currency, and in the latest BIS FX volume survey, volumes grew significantly to $120 billion from $34 billion three years earlier; the Chinese currency had 2.2% of global market share. The report states that this was primarily due to “a significant expansion of offshore renminbi trading.”
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George Popescu, CEO of Boston Technologies commented to Forex Magnates about the launch in an emailed statement, he said: “It was just natural to start offering USDCNH, as that is of very strong demand in the world. We expect that CNH should become the 2nd most traded currency as soon as China wishes so.”
Boston Technologies aggregates pricing from a range of liquidity providers, its main prime broker is Rabobank. The firm will offer a range of contracts including micro (0.01 1,000 units) and mini lots (0.1 10,000) units.
Forex Magnates has learned that Boston Technologies has established a local arm of its software consulting firm in China, with the correct legal framework. A company spokesperson said: “Boston Technologies went through the effort of seeking the right legal setup to open our Shanghai office by working with the 3 largest Chinese and US law firms in our field.”
International exchanges have also seen opportunities in the Chinese currency, Hong Kong’s main multi-asset exchange launched yuan currency futures last year in September (2012), Singapore’s main stock exchange has followed suit and went live on the 11th of November.