Dubai bourse to launch currency futures

Emirates Securities and Commodities Authority has approved Dubai Gold and Commodities Exchange's (DGCX) application for launching currency futures trading.

Initially, DGCX will trade futures contracts in three currencies "� euro-dollar, yen-dollar and sterling-dollar with contracts maturing in March, June, September and December each year. These will be deliverable contracts.

DGCX will announce contract specifications and procedures in detail for existing or new members to participate in these markets.

The norms will include a category of membership, to be known as Forex Trade Membership, for those entities which wish to trade on DGCX currency markets as principal. National Bank of Dubai and HSBC have agreed to act as 'delivery banks' for the purpose of settlement of DGCX currency future contracts.

The average daily international foreign exchange trading volume was $1.9 trillion in April 2004, according to a Bank of International Settlements study.

Also as per Futures Industry Association figures, total volumes in exchange-traded foreign currency derivatives rose more than 57 per cent to 165.51 million contracts in 2005, from 55.34 million in 2004.

David Rutledge, director of DGCX and CEO of Dubai Metals and Commodities Centre, said, "Dubai is fast emerging as a financial hub in the Middle-East, with many of the Fortune 500 companies having a presence here. The region has a huge potential for currencies trading."