Currency traders flock to Dubai

Dubai is fast emerging as a major trading hub for foreign exchange with traders from the United States and Europe coming to the emirate to tap those wanting to hedge their currency risks.

The news comes as Dubai's local commodities exchange, the Dubai Gold and Commodities Exchange (DGCX), reported an 88 per cent year- on-year increase in its currency trading volumes.

While forex traders saw a 40 per cent rise in the number of people trading in currencies, traders at DGCX said currency futures account for 40 per cent of their overall commodities futures volumes. Currency futures have constantly been among top three commodities traded at the exchange.

The exchange's currency products comprise of euro/dollar, sterling/dollar, yen/dollar and Indian rupee/dollar futures.

"Dubai is a hub for currency traders not only from the Middle East but also from Iran, Africa and the Subcontinent," said Denis Mysenko, Branch Manager, Forex4you, a company headquartered in Cyprus. Dubai is mostly attracting forex traders from London, a city known for its comfortable financial regulations and an acceptance for outflow of capital.

"Dubai and the region is very important for us," said Mike Baghdady of Training Traders in London.

Meanwhile, the number of people interested in forex has been rising.

"We have seen a 40 per cent rise in the number of people trading in currencies. The number has steadily increased over the past three to four years," said Katia Tayar, founder and CEO of Arabcom group. Most of the forex traders coming to Dubai trade in spot markets and on private platforms. In practical terms, they would be competing with the DGCX to attract customers.

Traders registered at the DGCX said currency trade has continuously grown over the past months and on an average comprises 40 to 45 per cent of their trade volumes at the Dubai-based commodities exchange.

"Currency trade comprises major chunk of our overall volumes," said Sajith Kumar PK, CEO of Dubai based JRG International.

 

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