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Currency ETC assets rise USD45m in two months

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ETF Securities has seen assets in its exchange-traded currencies platform grow to USD45m after only two months of trading with weekly trading volumes rising over 400 per cent over the period.

Currency ETCs, which are long USD and short G10 currencies, have seen the most interest from investors, making up 74 per cent of assets with USD strengthening 2.8 per cent since the inception of the currency platform.

ETFS Short JPY Long USD has been the most popular trade, capturing 49 per cent of assets, while the Canadian dollar held the most net long positions.

The platform has seen steady increasing turnover since the inception with trading volumes growing at over 150 per cent per week.

Seventy five per cent of trading volumes have occurred in ETCs which are long USD and short G10 currencies, with ETFS Short AUD Long USD and ETFS Short GBP Long USD each taking 21 per cent share of trading volumes, followed by ETFS Short EUR Long USD (14 per cent) and ETFS Short JPY Long USD (12 per cent).

Martin Arnold, senior analyst, ETF Securities, says: “The return of investor risk appetite was a key theme in 2009 and signalled the beginning of a long period of structural weakness for the US dollar. More volatile currencies like the Australian and New Zealand dollars performed strongly. Sentiment began to reverse toward year¬end as investors became more wary about whether the strong price performance of risk assets in 2009 could be sustained. As a result, the beginning of 2010 has been characterised by a degree of caution. As a result, investors have looked to use short Currency ETCs like ETFS Short EUR Long USD and ETFS Short JPY Long USD  to implement more cautious trading strategies.”

The first 18 currency ETCs were listed on the London Stock Exchange on 12 November and track MSFX Currency Indices.

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