The New York Board of Trade (NYBOT) recently became the first exchange to offer a futures contract for trade-weighted Euros. Previously, institutions and companies wishing to hedge their exposure to the Euro currency were forced to buy contracts on a specific currency pair (typically the USD-Euro pair). With the advent of this new futures contract, they will now be able to protect themselves against changes in the Euro, relative to a basket of currencies. In addition, individuals who wish to bet solely on or against the Euro, can now do so, without worrying about how the USD will perform relative to the Euro. The Financial Times reports:

The NYBOT contract is based on a weighted average of the euro against five other currencies; the US dollar, sterling, yen, Swiss franc and Swedish krona. This is less comprehensive than the 23 currencies the European Central Bank uses to calculate the euro’s nominal effective exchange rate.

Read More: Nybot set to offer euro contracts