Sunday 29 March 2009

Currency futures gain allure amid volatile prices

Currency futures are showing signs of becoming the most attractive alternative asset class in the UAE so far in 2009, led by continued price volatility and a focus on currency risk hedging strategies, said Malcolm Wall Morris, chief executive officer of the Dubai Gold and Commodities Exchange (DGCX).

"The ongoing volatility in the currency markets will continue to encourage market participants to hedge their exposure to foreign currencies. From a long-term perspective, currency futures are especially beneficial to both individuals and commercial entities with investments abroad or those who are planning to invest abroad," he said.

Since the start of 2009, 147,000 currency futures contracts have traded on DGCX, valued at $9.4 billion (Dh34.5 billion). This compares with 53,000 and $4.6 billion during the same period last year, representing a 104 per cent growth in the value of contracts traded for the currencies product range.

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