Major banks are turning to the IntercontinentalExchange’s (ICE) U.S. dollar index for boosting foreign exchange (FX) hedging, The Wall Street Journal reports. The index benchmarks the U.S. currency against a group of other global currencies.

ICE reported that derivatives trading linked to the dollar index brought over 850,000 contracts in July 2011. ICE may join CME Group and London-based clearinghouse operator LCH.Clearnet in creating trade-clearing capabilities for FX derivatives dealt off-exchange.

Click here for the story from The Wall Street Journal.