NDFs and the Geopolitical Environment That Drives Them

Thursday, 24/06/2021 | 18:22 GMT by Finance Magnates Staff
Disclaimer
  • Fundamental, technical, and geopolitical factors drive the FX market, and the latter has become the most prominent.
NDFs and the Geopolitical Environment That Drives Them
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Starting from the 2008 global financial crisis, FOREX, the worlds largest traded market, has certainly had its fair share of ups and downs over the last decade or so.

But what makes trading forex and forex CFD’s so opportunistic, is not only that it allows investors to benefit from both rises and falls in curriencies, but that each currency pair offers unique and distinctive investment prospects.

Fundamental, technical and geopolitical factors drive the forex market, and it is the latter that has recently become the most prominent.

Different geopolitical aspects impacting the world today have been the underlying drivers that have shifted the forex market according to economic, technological, environmental, and globalisation factors.

Put simply, the Forex market continues to evolve, and the astute investor needs to envole too.

This shift in the forex market can been seen in the almost paradigm change we are experiencing from the more mainstream currencies to increased market activity in non-deliverable forward (NDF) and EM currency trading.

NDF trading has risen dramatically over the past two years in comparison to any other period in the forex market’s history.

With the economic chaos that the COVID-19 pandemic has brought on every country’s economy the forex market, and in particularly NDF trading opportunities and volatility, continue to be as strong as ever.

They say where there’s chaos there’s opportunity and with those looking to take control of their own destiny during these uncertain times, we would have to agree.

We now live in an environment where individuals are being restricted from leaving their houses and are often compelled to work from home.

And in this many have seized the opportunities by looking for alternative ways to generate differing forms of income, while in parallel, technology advancements are being designed and implemented for easier online access, advanced trading tools, and individuals are finding ways to be educated online to familiarize themselves with the forex market that they were entirely alien to previously.

The trend in growing FX volumes looks set to continue, and no where more than in NDF’s.

Trading in NDF markets continue to advance in response to restrictions limiting access to the onshore markets.

As a result, NDF markets are frequently a more attractive option, especially to investors, banks, and corporates, because of lt of increased trending volatility with improved Liquidity , no convertibility risk, and minimal credit risk.

The Asian region accounts for the highest traded NDF currency volumes worldwide. Asia accounts for three of the top four NDF currencies globally. As of April 2019, the Indian Rupee (INR) the Korean Won (KRW), and the Taiwanese Dollar (TWD) currencies accounted for some 55% of the average daily total global NDF turnover of USD285 billion.

Since 2016, NDF trading in the INR, TWD, and KRW have exploded, rising by some 204%, 168%, and 100%, respectively year-on-year.Outside of Asia, the Brazilian Real (14%) and the Russian Ruble (2%) also enjoy large and growing NDF turnover with sizeable trending volatility.

Highlighting the importance of NDF markets for price discovery from the policymakers' perspective, NDF trading volume for the INR, KRW, and TWD is also large relative to other foreign exchange forward products, far exceeding the forward activivity across the more traditional currency pairs.

If you are looking to take advantage of NDF liquidity and to start trading in this opportunistic markets, a great place to start is Sheer Markets, a newly established financial institution that received a regulatory license from the Cyprus Securities and Exchange Commission (CySEC) late in 2020.

Sheer Markets recently announced the extension of their offering with live streaming of CFD NDFs and EM currencies across the MT4 and MT5 trading platforms.

In addition to live streaming NDFs, EMFX and FX, Sheer Markets also offers trading opportunities in Cryptocurrencies , equities, indices, and commodities.

Sheer Markets was established in 2020 with the mission to introduce a range of products that have been largely unavailable to online traders and investors through the MetaTrader 4 and MetaTrader 5 trading platforms.

With traders looking for new investment opportunities, the Sheer Markets product range presents a wider scope of liquid markets for the retail investor.

Starting from the 2008 global financial crisis, FOREX, the worlds largest traded market, has certainly had its fair share of ups and downs over the last decade or so.

But what makes trading forex and forex CFD’s so opportunistic, is not only that it allows investors to benefit from both rises and falls in curriencies, but that each currency pair offers unique and distinctive investment prospects.

Fundamental, technical and geopolitical factors drive the forex market, and it is the latter that has recently become the most prominent.

Different geopolitical aspects impacting the world today have been the underlying drivers that have shifted the forex market according to economic, technological, environmental, and globalisation factors.

Put simply, the Forex market continues to evolve, and the astute investor needs to envole too.

This shift in the forex market can been seen in the almost paradigm change we are experiencing from the more mainstream currencies to increased market activity in non-deliverable forward (NDF) and EM currency trading.

NDF trading has risen dramatically over the past two years in comparison to any other period in the forex market’s history.

With the economic chaos that the COVID-19 pandemic has brought on every country’s economy the forex market, and in particularly NDF trading opportunities and volatility, continue to be as strong as ever.

They say where there’s chaos there’s opportunity and with those looking to take control of their own destiny during these uncertain times, we would have to agree.

We now live in an environment where individuals are being restricted from leaving their houses and are often compelled to work from home.

And in this many have seized the opportunities by looking for alternative ways to generate differing forms of income, while in parallel, technology advancements are being designed and implemented for easier online access, advanced trading tools, and individuals are finding ways to be educated online to familiarize themselves with the forex market that they were entirely alien to previously.

The trend in growing FX volumes looks set to continue, and no where more than in NDF’s.

Trading in NDF markets continue to advance in response to restrictions limiting access to the onshore markets.

As a result, NDF markets are frequently a more attractive option, especially to investors, banks, and corporates, because of lt of increased trending volatility with improved Liquidity , no convertibility risk, and minimal credit risk.

The Asian region accounts for the highest traded NDF currency volumes worldwide. Asia accounts for three of the top four NDF currencies globally. As of April 2019, the Indian Rupee (INR) the Korean Won (KRW), and the Taiwanese Dollar (TWD) currencies accounted for some 55% of the average daily total global NDF turnover of USD285 billion.

Since 2016, NDF trading in the INR, TWD, and KRW have exploded, rising by some 204%, 168%, and 100%, respectively year-on-year.Outside of Asia, the Brazilian Real (14%) and the Russian Ruble (2%) also enjoy large and growing NDF turnover with sizeable trending volatility.

Highlighting the importance of NDF markets for price discovery from the policymakers' perspective, NDF trading volume for the INR, KRW, and TWD is also large relative to other foreign exchange forward products, far exceeding the forward activivity across the more traditional currency pairs.

If you are looking to take advantage of NDF liquidity and to start trading in this opportunistic markets, a great place to start is Sheer Markets, a newly established financial institution that received a regulatory license from the Cyprus Securities and Exchange Commission (CySEC) late in 2020.

Sheer Markets recently announced the extension of their offering with live streaming of CFD NDFs and EM currencies across the MT4 and MT5 trading platforms.

In addition to live streaming NDFs, EMFX and FX, Sheer Markets also offers trading opportunities in Cryptocurrencies , equities, indices, and commodities.

Sheer Markets was established in 2020 with the mission to introduce a range of products that have been largely unavailable to online traders and investors through the MetaTrader 4 and MetaTrader 5 trading platforms.

With traders looking for new investment opportunities, the Sheer Markets product range presents a wider scope of liquid markets for the retail investor.

Disclaimer
About the Author: Finance Magnates Staff
Finance Magnates Staff
  • 4271 Articles
  • 135 Followers
About the Author: Finance Magnates Staff
  • 4271 Articles
  • 135 Followers

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