USD/CNH futures shoots past US$119b

TRADING value for the Singapore Exchange (SGX) USD/CNH (US dollar and offshore Chinese yuan) futures surpassed US$119 billion on March 27, as investors looked to hedge the renminbi on the back of the economic fallout from the Covid-19 pandemic, according to data from SGX. 

Amid the mounting uncertainty surrounding the virus outbreak and border lockdowns, demand for risk management on currencies has "increased tremendously", said K. C. Lam, SGX's head of FX and rates.

The Indian rupee has also been trading at a record low against the US dollar, leading to more financial market participants managing their risks on SGX's platform, said SGX. Open interest for SGX INR/USD futures reached a new daily high of 122,738 contracts with total notional value of US$3.27 billion on March 20. 

"Our clients are hedging more than usual, specifically on USD/CNH and INR/USD. They are also building larger open interests to protect their positions, and during the recent bouts of market volatility, we saw traders acting swiftly to hedge exposures and positions, leading to significantly higher market activity," said Mr Lam.