The Dubai Gold & Commodities Exchange (DGCX) witnessed an uptick in FX trading volumes for the month ending March 2022, driven by increased investor interest in Euro and British products.
DGCX’s G6 currencies portfolio recorded year-on-year volume growth of 140 percent compared to the same period last year. This surge was led by high levels of volatility, coupled with the need to manage counter-party risk which strengthened the value proposition of exchange based forex futures trading.
British Pound and Euro Futures Contracts were the standout performers, registering year-to-date Average Daily Volume (ADV) growth of 527.5 percent, and 261.5 percent, respectively. The contracts gained traction as investors sought to take the advantage of trading opportunities they offered on the back of heightened market volatility triggered by the Russian-Ukrainian conflict.
Trading volumes in the Japanese Yen, as well as the Australian Dollar, registered a significant year-to-date growth of 339.2 percent and 755.76 percent respectively.
DGCX’s products are geared towards offshore investors
Additionally, the DGCX’s Pakistani Rupee (PKR) Futures Contract also registered the highest monthly volume since its launch in 2021, registering a combined total of 7,158 lots valued at $79.52 million during the month.
The UAE main bourse has maintained its momentum into the second quarter of the year, as it continues to provide investors with a wide range of derivative products that allow them to manage their risk effectively.
Les Male, CEO of DGCX, said: “Trading activity for March was led by the DGCX’s currency portfolio, as market participants looked to manage currency risk in an uncertain climate arising from geopolitical events and changing monetary policies. The G6 Currency portfolio in particular saw a significant increase in demand, with all six contracts witnessing an uptick in volumes. We remain committed to providing our members with innovative and value-added products and continue to work towards offering them the best possible trading experience.”
DGCX was the first in the MENA region to launch FX Rolling Futures Contracts (Euro, Pound Sterling and Australian Dollar), whilst expanding the range of Indian Rupee/US Dollar contracts with the launch of a Weekly INR-US Dollar Futures Contract.
Many of DGCX’s products are geared towards offshore investors; that is why it often sees spikes of trading activity in foreign-currency referenced contracts. The demand is likely based on the usage of these products for hedging purposes when financial markets are experiencing sharp volatility.