Refinitiv Reforms Thai Baht FX Benchmarks

Interest in trading emerging markets currencies has increased in recent months due to rampant Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term. The Thai baht is the latest EMFX currency in focus for the former financial and risk business of Thomson Reuters, Refinitiv.

The company revamped its offering as it started sourcing Thai baht and Thai Baht Offshore data from its Matching platform. The platform is Refinitiv’s anonymous central limit order book.

Both currencies have become ‘trade’ currencies using the WM/Reuters Trade Methodology. The change was launched on October 1, 2018, and is available today.

Before the implementation of the algorithm, which includes data from Matching, the THB and TOF benchmarks were calculated with a different methodology. The rates were based on indicative interbank quotes provided by a multitude of financial institutions.

Commenting on the move, the Global Head of Benchmarks at Refinitiv, Stephan Flagel, said, “The WM/Reuters FX Benchmark is valued by clients worldwide and we are proud to evolve the THB/TOF benchmarks to reflect accurately the new reality of the market, recognizing its enhanced Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and transparency.”

Thai Baht Liquidity and Volatility

After rallying through until April this year, the Thai baht has been sold off in light of global emerging markets tensions. The currency is not the most speculative instrument as FX flows, and liquidity remain tight.

Refinitiv included the data from Matching after a thorough review of the market. The company believes that the move achieves the necessary requirements regarding sufficiency, quality and data hierarchy to evolve these benchmarks to become trade based.

Refinitiv’s WM/Reuters service is the leading marketplace for spot rates. The data covers over 150 currencies.

“Our WMR leadership and colleagues at Refinitiv have unparalleled market expertise and work closely with diverse market participants globally to ensure that our benchmarks are compliant with global regulations. The data is calculated using multiple broad and liquid sources, and is subject to stringent quality controls.”

The Thai baht addition compliments Refinitiv's financial benchmarks portfolio. The company is administering over 30 key rates and serves as a calculation agent for over 40 critical national and regional interest rates and FX benchmarks. The countries include Singapore, Hong Kong, and Russia.