CHICAGO (HedgeWorld.com)–Eurex will add foreign exchange futures to its derivatives menu Sept. 23, using its Eurex US platform to offer 23-hour daily trading for currency-pair contracts.
To encourage currency players to trade through Eurex, the exchange is waiving fees for all users through the end of the year after the launch. Thereafter, member firms will be charged 10 cents (US) per contract side (or 50 cents per US$1 million) for their proprietary trading activities, while end users and customers will pay 50 cents per contract side, or US$2 per US$1million. A variety of other incentives will be offered to market makers and early adopters who generate consistent and increasing volume.
Initially Eurex will offer six currencies paired with the dollar–euro, Australian dollar, British pound, yen, Swiss franc and Canadian dollar–along with four cross-currency pairs: euro/yen, sterling/yen, euro/Swiss franc and euro/sterling. Other currencies may be added in the future, executives said Thursday.
At a press conference, Eurex Chief Executive Rudolf Ferscha said the exchange is jumping into currencies to tap into the continuing growth of FX as an asset class, noting that dedicated currency management strategies are becoming increasingly commonplace in Europe and the United States as an increasing number of market participants, including hedge funds, are gaining access to interbank prices via electronic trading platforms.
Estimates show the foreign exchange market hovering around the US$2 trillion mark in daily turnover.
"By entering the FX market, Eurex will further expand its portfolio of financial derivative products," Mr. Ferscha said. "Structural changes in the global FX markets have further driven use of FX products and increased demand for the transparency and reduced counterparty risk. Listing FX contracts on Eurex US will offer the global marketplace the opportunity to trade FX on a liquid and transparent market with a highly effective distribution network."
