CMC Markets

CMC Markets Launches 12 Forex Baskets to Hedge Against Geopolitics

The leading provider of spread betting and contracts for difference (CFD) has further expanded its range of bespoke indices by adding 12 new proprietary forex baskets, offering clients a convenient way to gain diversified exposure to a dozen worldwide economies.

The indices, bespoke to CMC Markets, provide a unique approach to country-specific economic exposure and were constructed on a trade-weighted basis, with the stability and liquidity of each currency pair within the index being taken into account. This helps ensure consistent pricing can be delivered, even in volatile markets,
while the maximum weighting of any one cross has been capped at 40% to prevent any undue influence from a single currency pair.

Clients can now respond proactively to a rapidly moving geopolitical agenda. As an example, trading GBP/USD over Brexit offers exposure to sterling, but leaves clients vulnerable to an unexpected move on the US dollar following events such as an announcement from the FederalReserve, or news of progress in US-China trade talks. The newly-created CMC GBP Index allows clients to trade on the pound against a weighted combination of the US dollar, Chinese yuan*, euro,
Swedish kroner, Canadian dollar, Swiss franc, Japanese yen and Norwegian kroner, all in a single transaction.

simon campbell

Simon Campbell, Group Head of Trading at CMC Markets, commented: “We are continually working with our clients to ensure we deliver a product suite which allows them to trade in exactly the way they want. The increasingly complicated geopolitical landscape is creating a range of trading opportunities, and these new indices give CMC clients the potential to gain broad-based exposure to a number of distinct economies, from the eurozone or US, to countries like Sweden, Norway
or Singapore.”

CMC’s other forex indices are based on the following base currencies: euro, US dollar, Canadian dollar, Japanese yen, Chinese yuan, Singapore dollar, Australian dollar, New Zealand dollar, Norwegian kroner, Swedish kroner and Swiss franc. CMC Markets will also continue to quote a price for its legacy US Dollar Index instrument under the existing name.

The FX and CFD broker has been launching proprietary indices, including three new indices for the energy, agricultural and precious metals sectors, as the broker offers commodity indices as a cost-effective way to diversify and cushion the volatility risk of individual commodities. The broker also introduced three new crypto
indices to its trading offering, each made up of a different group of cryptocurrencies.

CMC Markets has recently launched free tools for MetaTrader 4 by partnering with FX Blue. Traders were offered 12 add-ons and 15 indicators for free as they are
now allowed to trade with Expert Advisors (EAs). A total of 27 additional applications will be available to any CMC Markets client actively trading across the online platform. Featured add-ons include a correlation matrix and sentiment trader, whilst indicators on offer range from simple order histories and pivot points through to Renko blocks and Keltner channels.