Foreign exchange

Brazilian exchange introduces new currency futures

Brazilian exchange group BM&F Bovespa is to launch eight new currency futures contracts on 15 August.

Created as an alternative for investors who find it difficult to trade directly on the international market, as well as Brazilian companies that require currency hedging tools, the new derivatives consist of six futures contracts and two mini futures contracts. The regular futures contracts are for the Brazilian real against the South African rand, Turkish lira, New Zealand dollar, Chilean peso, Chinese yuan and Swiss franc, which will be tradable from September 2011 maturity. As of 15 August, two new mini futures contracts, the Mini euro futures contract and the Mini US dollar futures contract, will also be available.

The underlying foreign exchange rates that for the contracts are calculated by a combination of the foreign exchange rate for Brazilian reals per US dollar and by the exchange rate of the underlying foreign currency per US dollar.

On 31 May 2010, the exchange began expanding its foreign currency portfolio and launched five contracts simultaneously: Australian dollar; Canadian dollar; Japanese yen; pound sterling; and Mexican peso.

Meanwhile, the exchange reported its July market performance, including a 25% increase in the number of exchange-traded fund trades since June. The exchange's equity market also showed an overall increase in volumes, with 11,016,993 trades as against 10,187,883 in June, at a value of US$76.44 billion and US$79.35 billion respectively.