Deliverable Renminbi (USD/CNH) Futures Start Trading on the CME Today

Announced in September of last year, the deliverable renminbi futures began trading today on the CME’s Globex electronic trading network.

Announced in September of last year, the deliverable renminbi futures began trading today on the CME’s Globex electronic trading network. Trading comes slightly ahead the CME Group’s initial Q2 launch date. For the launch, the CME Group posted data from the Hong Kong Monetary Authority about the renminbi offshore market which showed end of 2012 deposits at 600 billion CNH.

According to Derek Sammann, Senior Managing Director, Financial Products and Services at CME Group, CME Group “listened to its customers” and developed the product according to their needs which includes putting maturity out to three years, have it trade 23 ½ hours a day alongside other FX products, and creating both standard $100,000 and micro $10,000 lot sizes. He added that the “Renminbi market really has grown, particularly the offshore market, over the last 2 years. This is no longer a market that just trades during Asian hours. It trades during European hours and increasingly during US hours.”

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Globex USDCNH Quotes 10AM GMT (Source CME)
Globex USDCNH Quotes 10AM GMT (Source CME)

Adding liquidity is the Bank of China Hong Kong (BOCHK) which is a designated market maker for the product. Commenting on the launch, Mr David Wong See Hong, Deputy Chief Executive of BOCHK, said, “BOCHK has been taking a leading role in the development of the offshore RMB business. We are pleased to be the first bank designated as a market maker for the new USD/ CNH futures and will be committed to providing transparent and competitive markets for these contracts to help facilitate the global usage of RMB funds.” The BOCHK also added “As the leader in the offshore RMB market, BOCHK has taken the lead by launching RMB deliverable forward contract and interest rate swap for investors and institutions to hedge currency and interest rate exposure while effectively managing the related risks.”

2013 Strong Volume Continues

In addition to the USDCNH launch, the CME posted that FX trading continues to be strong during February as post President’s holiday volume averaged $125 billion last week. This compares to ADV for January of $114 billion and $106 billion for 2012.

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