Brokerage > Futures

Currency Futures


Foreign exchange market is the largest and most liquid financial market in the world. With huge trading volume, high liquidity, 24-hour continuous operation, traders include central bank, investment banks, currency speculators, corporations, governments and other financial institutions. According to the figure from the Bank of International Settlements (BIS) in April 2010, daily turnover was reported to be over US$ 3.98 trillion. Currency future, a.k.a. foreign exchange future is a contract to exchange one currency for another at a specified date in the future at a price, so-called exchange rate. The main different between the future and spot market is that the former is traded in terns of a certain amount of US dollars per unit of other currency while the latter not. Of 750,000 currency contracts traded everyday in Chicago Mercantile Exchange (CME), the delivery date is set to the second week of every quarter month however investors usually close out before that. The factors influences the exchange rates are notably: interest rate, GDP, capital flow, sovereign credit rating, balance of trade, external debt statistics and etc.