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Foreign Exchange

HSBC to stream 24-hour interbank CNH cross-rates via API

(UPDATE: clarifies live-streaming of CNH crosses for all CNH market makers) HSBC has launched six new currency trading pairs tied to the CNH – the offshore renminbi (RMB) – providing 24-hour interbank streaming of the cross rates on its proprietary API.

The bank will now continuously stream the exchange rates of the CNH versus the euro, British pound, Hong Kong dollar, Singapore dollar, Canadian dollar and Mexican peso, in addition to the existing US dollar offering. HSBC says it plans to add further cross rates. While USDCNH has grown to be a common feature in FX markets, direct crosses in other currencies linked to RMB are virtually non-existent, other than through bilateral trades.

Transactions involving RMB and non-USD currencies therefore typically require a two-stage process – for example, to undertake a EURCNH transaction, a EURUSD trade would need to take place, followed by a USDCNH deal.

CNH crosses avoid the necessity to cross two bids and offers, thereby reducing the transaction costs for clients.

With China standing as the world’s largest exporting nation, global demand for RMB has been rising steadily. According to financial messaging service Swift, global payments transacted in RMB rose 13.2% in March versus the previous month. Worldwide payments rose 8.6% during the same period.

Anita Fung, HSBC’s chief executive officer in Hong Kong, says: “The development of additional offshore RMB trading pairs to support payment settlement and hedging needs globally will be fundamental to the continued internationalization of the RMB and will further reinforce Hong Kong’s status as the leading offshore RMB hub globally.” 

While several leading FX banks already stream CNH crosses via their single-dealer platforms, HSBC says it is the first bank to offer CNH cross rates on interbank platforms, such as Icap''s EBS and Thomson Reuters platforms.

Barclays says it has been providing CNH crosses via its single-dealer platform, BARX, since July. It provides prices on all the same crosses as HSBC, with the exception of the Mexican peso, as well as offering rates on other crosses such as AUD, CHF, DKK, NOK, NZD, SEK and JPY.

Deutsche streams CNH cross rates against 14 currencies, via Autobahn, while UBS introduced CNH pricing on their platform, FX Trader Plus, six months ago.

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