FTSE Cürex FX Index Series adds Offshore Renminbi FIX benchmarks

Oct 9th, 2012 | By | Category: ETF and Index News

FTSE and Cürex Group have announced the expansion of the FTSE Cürex FX Index Series with the addition of seven new streaming benchmark currency pairs.

FTSE Cürex FX Index Series adds Offshore Renminbi FIX benchmarks

FTSE Cürex FX Index Series adds Offshore Renminbi FIX benchmarks

The benchmarks enable investors to trade Offshore Renminbi (CNH) against seven major currencies at an independently calculated benchmark rate.

The new indices increase the number of executable currency pair benchmarks included in the index series from 192 pairs to 199 pairs.

In addition to the FTSE Cürex FX Benchmark USD/CNH FIX published June 12, 2012, the new Offshore Renminbi FIX rates are:

  • FTSE Cürex FX Benchmark EUR/CNH FIX
  • FTSE Cürex FX Benchmark GBP/CNH FIX
  • FTSE Cürex FX Benchmark SGD/CNH FIX
  • FTSE Cürex FX Benchmark CNH/JPY FIX
  • FTSE Cürex FX Benchmark AUD/CNH FIX
  • FTSE Cürex FX Benchmark CNH/HKD FIX
  • FTSE Cürex FX Benchmark CAD/CNH FIX

The FTSE Cürex FX Index Series is distinguished by its rules-based and transparent methodology which features multiple institutional pricing sources at multiple depths of liquidity. Bid and offer FIX rates and indices are calculated on a 24/5 streaming basis with 15 minute ‘snap’ FIX rates and indices calculated 96 times per day, providing independent, time-stamped valuation metrics to better align NAV calculation with underlying market closing times.

Donald Keith, Deputy Chief Executive, FTSE Group said: “The emergence of Chinese Renminbi as Asia’s most important emerging reserve currency has provided a catalyst for the development of new tools that enhance market transparency, and enable more sophisticated currency risk management. With the launch of these additional benchmark pairs, investors can now execute Offshore Renminbi trades at an independently calculated, executable benchmark rate.”

Bill Dale, Chairman and Chief Executive of Cürex Group, said: “We anticipate significant growth in Offshore Chinese Renminbi markets and support the development of financial products that promote transparent price discovery at venues where participants have equal access to sustainable liquidity.”

The expansion of the FTSE Cürex FX Index Series to include new Offshore Renminbi FIX benchmarks comes at a time when the Chinese currency is rapidly gaining importance globally.

Given the sheer size of the Chinese economy and its rising share of global output and trade, coupled with the fact that the Chinese government has recently taken steps to promote the international use of the renminbi, means the currency’s role in international finance and trade is bound to increase. However, because of capital controls and exchange restrictions, foreign investors cannot easily trade the currency.

One way foreign investors can access the currency is via currency exchange-traded products (ETPs).

ETF Securities offers a range of London-listed exchange-traded certificates (ETCs) based Morgan Stanley MSFX indices. These include the ETFS Long CNY Short USD (LCNY), the ETFS Long CNY Short USD £ (LCNP), the ETFS Short CNY Long USD (SCNY) and the ETFS Short CNY Long USD £ (SCYP).

There are also a number of products available on the NYSE, including the WisdomTree Dreyfus Chinese Yuan ETF (CYB), which invests in very short-term investment-grade instruments; the CurrencyShares Chinese Renminbi ETF (FXCH), which maintains a deposit account denominated in Chinese Renminbi; and the Market Vectors-Chinese Renminbi/USD ETN (CNY), which tracks the performance of the S&P Chinese Renminbi Total Return Index.

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