CME Currency Futures

T

tradertony76

Hey All,

I'm working on building a set of screens to track intermarket trends. I'm rusty on my currency futures. Can someone verify I've got the understanding down here.

With the exception of the Brazilian Real and Russian Ruble, all contracts are cash settled.

Say I'm looking at the Euro contact:

Its size is 125,000 Euro. Say Jun 06 expires/settles at 1.2093.

A) Does the contract work such that the Short delivers at expiration 125,000 Euro and the long delivers 125,000*1.2093=$151,162.59.

So, you go short to hedge if you HAVE Euro and NEED dollars.

B) If so, is it correct that for each of the currency futures screen, a rising trend indicates a stronger FOREIGN currency and a WEAKER dollar (and of course, opposite for a falling trend).

Just want to make sure I've got my analysis right.

Thanks !

-T
 
Oh yes, one more question.

C)

Does the $Index contract go opposite the currency pairs contracts ?

That is, a rising trend on the $Index futures indicates a strengthening dollar and a falling trend indicates a weakening dollar ?

-T
 
Quote from tradertony76:


With the exception of the Brazilian Real and Russian Ruble, all contracts are cash settled.
More...

You probably made a typo, but it is just the opposite, I think they are all physically settled except for those two.
 
Quote from tradertony76:

Oh yes, one more question.

C)

Does the $Index contract go opposite the currency pairs contracts ?

That is, a rising trend on the $Index futures indicates a strengthening dollar and a falling trend indicates a weakening dollar ?

-T
More...

Yes, you are correct. The $ Index is a trade weighted geometeric average of six currencies (EC, JY, BP, CD, SF & Krona). So when it goes up, it means that dollar is strengthening against these six currencies overall, and vice versa for a falling dollar. So it may go up against a certain pair, not another and the index could go up or down.

For more info on the$ Index, go to www.nybot.com
 
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