USD/RMB (CNY) Futures

[scandal 951]

Yuan NDF futures are coming ...

http://www.cmegroup.com/trading/fx/usd-renminbi-futures.html

USD/RMB (CNY) Futures

Available in Standard and E-micro Sizes

Launching October 17, 2011

The Chinese renminbi – or RMB – has experienced rapid growth in deposit and trading volume both on- and off-shore. The renminbi is now being used for business transactions in multiple off-shore locations which include Hong Kong, Singapore, Korea, Australia and other areas around the world. Accordingly, a need for capital risk management tools for the Chinese currency has emerged.

To address this need, CME Group has developed USD/RMB futures.

These contracts will be offered in standard and E-micro sizes and will

be quoted in conventional interbank FX market terms.

Standard contracts: Based on USD 100,000

E-micro contracts: 1/10 the standard contract size, based on USD 10,000

[slim 1,530]

It's only a matter of time before the dollar is gone.

[scandal 951]

It's only a matter of time before the dollar is gone.

:rofl:

[mawilson 2,133]

That's cool.

[scandal 951]

Some selected clips from NewsHour tonight. Interesting perspective. I edited out the other guy because he was arguing contra

http://www.pbs.org/newshour/bb/business/july-dec11/uschina2_08-19.html

JEFFREY BROWN: But, staying with you, given the situation with the Chinese holding so much of the U.S. debt, what are the implications of that amid this market turmoil?

GORDON CHANG: Yes, I don't think that that actually gives the Chinese that much leverage, because you have got to think about the way the global markets operate.

You know, if the Chinese don't buy debt, well, they have got to, because their economy is geared to selling things to us. And if they want to sell our debt to hurt us, they have got to buy other things, like euros, pounds and yen. That's going to drive those currencies soaring, which means that Brussels, London and Tokyo have got to go out in the global markets to bring their currencies back down in value.

And that means the Chinese really don't have a weapon. So we have a lot of ability to deal with this.

...

JEFFREY BROWN: Well, coming back -- Gordon Chang, coming back to this question, though, at a moment like this, who needs whom -- who needs who most of all at this? So, when we go there, and we say, we reassure you everything is OK here, and they seek reassurances from us, weigh that balance for us.

GORDON CHANG: Well, they need us so much more, because their economy is geared to selling things to us.

And our problem -- we say, oh, they need to buy our debt. But our problem is not that there are not enough people in the world to buy Treasury securities. Our problem is there's been too many people willing to do that, which has not permitted the discipline in Washington.

So, you know, you have got to remember that on the Monday after the S&P downgrade, you know, what were the favorite investments in the world? Gold, Swiss francs and U.S. Treasuries. U.S. Treasuries, we're going to be OK even if the Chinese stopped buying. But they can't do that because they're selling things to us. They get dollars. They need to put them someplace. The only place to put them is Treasuries.

USD/RMB still moves in a very tight range. Not pegged, but hardly free floating. Where's the trading potential in an instrument like that? For other countries that have strict domestic currency controls, e.g. Brazil and India, the NDFs trade offshore and can move quite dynamically based upon the normal ebb/flow of hedging demand and carry trade. It remains to see who will be stronger: The Chinese central bank or the forex futures market. I'm not taking any sides.