The Asian structured foreign exchange derivatives market has picked up steam in recent weeks due to the greenback's fall against other major world currencies. "Given the recent dramatic movement in the fx market, we're seeing a lot of inquiries," said Samir Atassi, director in the strategic solutions group at Merrill Lynch in Hong Kong. For instance, Atassi noted that several companies are now looking at hedging their yen exposure as they tend to have revenues in dollars. Much of the outstanding yen liabilities are a result from bilateral loans from Japanese export agencies in markets such as China and South East Asia. "A lot of corporates weren't expecting such a rapid fall," he added.
"A lot of customers are looking at dollar weakness, which has become more pervasive and long-term," said Claudio Piron, head of foreign exchange strategy at Standard Chartered Bank in Singapore. Products such as knock-out puts with premium rebates have become popular.
Funds are looking at taking advantage of the fall, via multi-currency positions, according to Louis Cucciniello, v.p. in global foreign exchange options at JPMorgan in Singapore. "As the regional currencies have been moving more as a unit than before, we're starting to see people put on multi-currency positions." said Cucciniello.
