Singapore Exchange (SGX) has seen strong growth in its FX Futures business over the last 12 months, with the total volume of FX Futures contracts up 74 per cent year-on-year (y-o-y) to 759,983 contracts in July.
Open interest in these contracts was up 15 per cent y-o-y to 60,105 contracts as at the end of July.
The average daily trading volume for all SGX FX Futures through July was 36,190 contracts, representing a significant increase 74 per cent y-o-y. On a year-to-date basis, this translates to over 31,000 contracts traded per day. Since the introduction of FX Futures at the end of 2013, SGX has consistently raised the bar on the daily average trading volume as illustrated in the chart below.
The recent tax reform in India has been seen by market participants as a positive sign of the policy shift within the Indian government and has boosted confidence of overseas investors that continue to allocate portfolio flows to India. On the back of better fundamentals and increased investment, the Rupee has appreciated over 5 percent against the US dollar since the start of the year.
In July, the USD/INR remained range bound with volatility relatively low, extending the trend observed in June 2017. However, trading activity on the SGX INR/USD Futures continued to show strength with a 10 per cent month-on-month (m-o-m) growth to 596,763 contracts (USD18.5 billion) traded in July 2017. The total volume traded year-to-date has grown 18 per cent year-on-year.
Open interest for SGX INR/USD Futures at the end of July rose 35 per cent m-o-m to 37,569 contracts.
SGX Consolidates Position as Premier Exchange for Offshore Renminbi Trading for Seventh Consecutive Month
The Renminbi continued to strengthen against the US dollar in July, extending a trend from the previous month. However, the USD/CNH spot market traded in a narrow range resulting in low volatility that also affected overall volumes for USD/CNH Futures across various exchanges.
While the total exchange-traded USD/CNH Futures contracts traded globally fell 12 per cent m-o-m in July, the volume for SGX USD/CNH Futures in the month fell by 7.7 per cent m-o-m to 150,567 contracts. Despite this relatively modest drop in volume, both open interest and monthly trading volumes grew significantly by 96 per cent and 416 per cent respectively on a y-o-y basis, helping SGX to consolidate its position as the premier exchange for USD/CNH Futures.
July also saw increased trading activity across its broader FX futures portfolio.
SGX introduced new Futures contracts on MYR/USD and MYR/SGD on 17 July to address the needs of market participants. The MYR/USD Futures in particular has seen some positive trading activity since launching.
The volume for SGX USD/SGD Futures grew 42 per cent y-o-y to 5,292 contracts, with daily average volume for the month of 252 contracts (USD6.3 million).
Open interest for SGX KRW/USD Futures as at the end of the month was up 43 per cent m-o-m to 932 lots (USD20.4 million). Daily average volume for the month was 216 lots (USD4.7 million).
