CME to launch offshore yuan futures
CME Group, owner of the world's biggest futures exchange, will introduce deliverable futures for offshore yuan in the fourth quarter as growing use of the currency in world trade fuels demand for hedging tools.
The move will put it up against Hong Kong Exchanges and Clearing, which is the second-largest bourse operator by market value and has announced plans to make similar contracts available from next Monday.
China is the world's No1 exporter and the central bank estimates yuan trade settlement jumped as much as 80 per cent in the first five months of the year.
"There's a lot of customers requiring" instruments to limit risk from exchange-rate fluctuations, KC Lam, CME's Singapore-based head of foreign exchange for Asia, said.
"There's a push to internationalise the yuan; what's better than doing it on a globalised structure."
HKEx set the standard contract size for offshore yuan futures at US$100,000 each with tenures of up to one year and will offer trading from 9am to 4.15pm. Chicago-based CME would have similar-sized contracts of up to three years and US$10,000 futures with maturities of no more than 12 months, Lam said, adding that both types would be available in Asia, the United States and Europe.
The yuan has weakened 0.5 per cent this year, headed for its biggest loss since a dollar peg ended in 2005, as Europe's debt crisis and an economic slowdown in the US hurt exports.
Shipments rose 2.7 per cent from a year earlier last month and 1 per cent in July, the slowest growth rates since overseas sales declined in January, official figures show.