Currency futures are futures contracts where the underlying commodity is a currency exchange rate. These contracts offer investors the ability to enter the foreign exchange market in an environment that is similar to other futures contracts. Currency futures, also called forex futures or foreign exchange futures, are exchange-traded futures contracts to buy or sell a specified amount of a particular currency at a set price and date in the future. Like other futures products, currency futures are traded in terms of contract months with maturity dates falling in March (H), June (M), September (U) and December (Z).
Popular currency futures contracts include:
– AUD/USD Futures (Australian dollar/US dollar)
– CAD/USD Futures (Canadian dollar/US dollar)
– EUR/USD Futures (Euro/US dollar)
– GBP/USD Futures (British pound/US dollar)
– CHF/USD Futures (Swiss franc/US dollar)
– EUR/GBP Futures (Euro/British pound)
– EUR/CHF Futures (Euro/Swiss franc)
– EUR/JPY Futures (Euro/Japanese yen)
– JPY/USD Futures (Japanese yen/US dollar)
– NZD/USD Futures (New Zealand dollar/US dollar)
An advantage in trading the currency futures markets is that they are regulated the same way as other futures markets. They have a great deal more oversight than the spot forex market which is largely unregulated. Currency futures brokers must follow regulations enforced by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).
The above article is written in part by author Jean Folger who writes at http://financialedge.investopedia.com .
Anthony DiChi,
Your friend in Forex Currency Trading, FX Information and Forex News at TradeCurrencyNow