Hong Kong to offer Yuan Futures

With further developments on the Yuan taking place last week, the Hong Kong futures Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term has announced their intention to offer offshore Yuan Futures by the third quarter of 2012.

Hong Kong has long been a financial centre place for Chinese currency transactions.

HKEX aims to offer the product as a hedging tool for those exposed to the mainland currency - now expected to be more volatile after the widening of its daily trading band.

The yuan/US dollar futures contract will be quoted in yuan per US dollar and margined in yuan. Trading and settlement fees are also to be charged in the mainland currency, the local Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term operator said.

The Yuan is currently trading at 6.307 against the greenback.

A single contract will cost US$100,000 (HK$780,000), with exchange and settlement fees to be determined later. Demand for such futures products - seen as a mean to control the yuan's daily fluctuation - is expected to rise after the People's Bank of China last week expanded the trading band for onshore yuan to 1 percent against the daily parity rate.

Offshore yuan values, though not subject to this restriction, closely mirror the mainland.

Leading FX broker FXDD recently introduced currencies including the Chinese Yuan and Indian Rupee.

Forexmagnates team have written a detailed report on FX in China, available in the Q4 2011 quarterly report.