The Dubai Gold and Commodities Exchange (DGCX) saw a slight increase in currency trading volumes for the month ending February 2022, due to increased investor interest in market currencies emerging.
The UAE’s main derivatives exchange saw a record high of $13.68 billion in aggregate volumes as heightened market volatility triggered by the Russia-Ukraine conflict boosted exchange trading.
DGCX’s G6 Currency Portfolio saw a year-over-year percentage growth in volume compared to the same period last year. This surge was driven by high levels of volatility, coupled with the need to manage counterparty risk, which bolstered the value proposition of exchange-based forex futures trading.
DGCX reported a sharp rise in Indian Rupee (INR) trading, with its mini futures, options contract and weekly rupee contracts seeing increases of 67%, 206% and 87% respectively. DGCX’s West Texas Intermediary (WTI) futures also gained ground on the heightened volatility in oil markets – with annual growth of 136%.
British pound and euro futures were the best performers, recording double-digit average daily volume (ADV) growth. The contracts gained traction in the market as investors sought to take advantage of the trading opportunities they offered.
The UAE’s leading stock exchange maintained momentum in the new year as it continues to provide investors with a wide range of derivative products that allow them to effectively manage their risk.
In addition, DGCX successfully launched the region’s first rolling FX futures contracts (Euro, British Pound and Australian Dollar), while expanding the range of Indian Rupee/US Dollar contracts with the launch of a weekly futures contract INR-US dollar.
Many DGCX products are aimed at offshore investors; this is why he often sees spikes in business activity in Indian referenced contracts. The demand is probably based on the use of these products for hedging purposes when the financial markets experience high volatility.
Les Male, CEO of DGCX, said: “Volatility has been a recurring theme over the past few months as investors and traders continue to face a range of factors including inflation, oil prices and geopolitical developments.Against this backdrop, we have seen our precious metals portfolio lead the trading activity on the exchange.We have also seen a sharp rise in trading in the Indian rupee as market participants seek to hedge their exposure to the one of the fastest growing economies in the world.DGCX remains committed to providing its clients with a wide range of tradable products that meet their hedging and investment needs.