Brokerage firm CMC Markets has expanded its range of bespoke indices with the launch of a sterling index. This brings the total of baskets offered by the firm to 12.
CMC says the new indices are bespoke to it, and in-house management allows the company to ensure the composition is always relevant, as well as providing transparency in terms of pricing. The indices have been constructed on a trade-weighted basis, with the stability and liquidity of each currency pair within the index being taken into account, it explains, adding this helps ensure consistent pricing can be delivered, even in volatile markets, while the maximum weighting of any one cross has been capped at 40% to prevent any undue influence from a single currency pair.
Simon Campbell, CMC group head of trading, says: “We are continually working with our clients to ensure we deliver a product suite which allows them to trade in exactly the way they want. The increasingly complicated geopolitical landscape is creating a range of trading opportunities, and these new indices give CMC clients the potential to gain broad-based exposure to a number of distinct economies, from the eurozone or US, to countries like Sweden, Norway or Singapore.”
The newly-created CMC GBP Index allows clients to trade on the pound against a weighted combination of the US dollar, offshore Chinese yuan (CNH), euro, Swedish kroner, Canadian dollar, Swiss franc, Japanese yen and Norwegian kroner, all in a single transaction.
CMC’s other forex indices are based on the following base currencies: euro, US dollar, Canadian dollar, Japanese yen, Chinese yuan, Singapore dollar, Australian dollar, New Zealand dollar, Norwegian kroner, Swedish kroner and Swiss franc and the firm says it will continue to quote a price for its legacy US dollar Index instrument under the existing name.