OREANDA-NEWS. August 07, 2015. Driven by increased hedging demand  from a diverse base of market participants against the backdrop of a strengthening US dollar, SGX’s currency futures product suite started the second half of 2015 on a winning note.

Monthly volume in SGX INR/USD futures achieved a record 327,557 contracts traded (approximately US\\$10.2 billion in notional value traded), surging over fourfold year-on-year versus the 39,894 contracts traded in July 2014. Daily open interest in SGX INR/USD futures also soared to a new high of 42,742 contracts on 20 July, surpassing the previous month record high of 32,198 contracts on 25 June.

Source: Singapore Exchange as of 31 July 2015

SGX’s USD/CNH futures is also fast gaining traction with global market participants, as China continues to move swiftly to internationalise the Renminbi (RMB) and promote the currency as a global reserve currency.

Supported by an expanded pool of market makers including Bank of China, trading in SGX USD/CNH futures has surged in recent months. Trading volumes doubled month-on-month to a record 20,334 contracts traded (approx. US\\$2 billion in notional value traded) for the month of July, making SGX USD/CNH futures the most actively traded offshore RMB futures product globally.

Month-end open interest has similarly grown to a new high of 7,480 contracts or (approximately US\\$750 million in notional value) on 31 July, representing a threefold increase over June’s month-end open interest of 2,276 contracts.

With the International Monetary Fund (IMF) set to decide on the RMB inclusion in its Special Drawing Rights currency basket in the later part of the year and economists’ prediction for the RMB trading band to widen to 3%, demand for the currency could further increase as more investors seek out efficient risk management tools for their RMB-related exposures.