| Euro trade weighted index |
| Source: Deutsche Bank |
Deutsche Bank has launched a set of tradeable foreign exchange indices, with new products that make it simpler for clients to take positions on individual currencies.
The indices track one currency against a basket of others. These kinds of products are generally structured individually and sold over the counter, but the new tradeable indices are designed to make pricing and yield more transparent. If an index rises by, say, one point over a given period, the client makes one point on the investment.
"Clients look at the world and they form a view that, say, Europe is looking good," explains Rob Mandeno, the bank's global head of forex forwards trading. "But if they are going to trade that, they have to decide which currency will be on the other side of that trade - it is a two-decision process. But mostly they have only made one decision. In an index format they can now make one decision to buy Europe versus a basket of currencies."