Having recorded a new record high trading volume of $7.5 billion notional in its USD/CNH futures on Friday, August 2, SGX saw a 38% increase in volumes as trading resumed on Monday, August 5.
The initial surge in trading was precipitated by a tweet from US president, Donald Trump, that his administration plans to impose a 10% tariff on another $300 billion of Chinese goods, starting September 1.
SGX says that trading activity on its USD/CNH futures immediately increased following the tweet as various market participants looked to manage their currency risk. The notional amount of these futures traded on August 2 was $7.5 billion and $2.6 billion was traded during US trading hours on Friday morning, before the start of trading in Asia.
Today, the offshore USD/CNH rate went through 7.00 for the first time since 2008, leading to yet another increase in trading on SGX’s USD/CNH futures as the notional value of contracts traded hit $10.3 billion.
To give further context, the previous record in daily notional value for these contracts was $6.45 billion, set on June 3, 2019.
“SGX remains the venue of choice for currency risk management as global market participants continue to manage the impending impact of new tariffs and increased market volatility across all time zones. On Friday night, SGX’s USD/CNH futures saw traded volumes of over $3.22 billion during US trading hours, before the start of trading in Asia on Monday,” says KC Lam, head of FX and rates at SGX.