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Screenshot of a breaking news alert e-mail from Q2 2017
First foreign info provider to be allowed to deliver onshore CNY prices.
As global interest in China’s currency has grown, there has been increasing dialogue about the divergence of China’s internal “onshore” Renminbi market (CNY), and the trading of the currency outside China in the “offshore” market (CNH). While the offshore CNH market has grown as more and more international financial players offer free trading in the Renminbi, the internal Chinese CNY market — mainly trading between domestic banks in China — has remained somewhat of a mystery, and getting real time pricing from that market very difficult.
Bloomberg’s announcement Thursday that it is now authorised to deliver internationally live, interbank pricing for China’s onshore Renminbi (CNY) market, directly from the China Foreign Exchange Trade System (CFETS), is huge. For companies doing business in China (who isn’t nowadays?!), and those who just want to trade Renminbi crosses, they for the first time can have access to the “true” currency crosses, in real time — something we take for granted when it comes to virtually all other currencies.
For the retail FX world, it is another step in allowing brokers to feel comfortable in offering Renminbi crosses, as they will be better able to understand their exposures in real time.
Chinese authorities have been slowly relaxing currency trading rules the past couple of years, as the Renminbi takes a slow walk toward full international convertibility — and toward the Chinese currency establishing itself as one of the world’s reserve currency. Bloomberg rival Thomson Reuters recently announced a joint venture to launch a China-based FX brokerage.
For more on the global FX market see the LeapRate-Dow Jones Forex Industry Report.