Banks Use ICE Dollar Index For FX

Major banks are turning to the IntercontinentalExchange’s U.S. dollar index for boosting foreign exchange hedging.

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.