Given the dollar’s reported travails, it is perhaps no surprise that ICE has seen a substantial increase in its dollar index futures. In terms of contracts traded, activity this year is already 17% higher than in 2008 and November is already a record month, with around 320,000 contracts having changed hands.
In nominal terms, average daily volume is running at around $1.4 billion, but it is important to remember that the actual value of each contract traded (index price multiplied by 1,000) is directly impacted by the dollar’s weakness. Ray McKenzie, ICE’s vice-president of US futures product sales, is understandably pleased by the increased activity. “What is happening is that many traders who watch the DXY cash index have started to realize that ICE has the futures contract tied to this, and it is translating into increased volume,” he says. “We are seeing all types of traders coming in, from banks to hedge funds to retail.”