There are quite a few instruments on the foreign exchange market that allow traders to work with assets restricted in circulation. One of the most popular among investors has become the NDF – the Non-Deliverable Forward. It is an agreement to buy or sell a currency at a fixed rate on a future date, but without the physical delivery of that currency – the settlement is made based on the difference between the agreed rate and the actual one.
This format is typically used for national currencies whose free convertibility is restricted by government regulations. However, in its classical form, the NDF market is primarily available to large banks and corporations. The instrument entered the retail space thanks to the CFD (Contract for Difference) model. One of the few online brokers offering clients the opportunity to trade NDFs as CFD – combining the advantages of both approaches – is XFINE.
CFDs are well known to most traders through operations with shares, indices, oil, and gold. The principle is simple: the trader gains or loses based on the difference between the opening and closing prices of a position. The underlying asset itself is never physically delivered. This same logic made it possible to integrate NDFs into the retail trading infrastructure. In essence, an XFINE client can open and close positions on restricted-convertibility currencies just as easily as they would on major pairs like EUR/USD or GBP/USD.
Among the currencies available in the NDFs as CFD format are the Brazilian real (USD/BRL), Chilean peso (USD/CLP), Colombian peso (USD/COP), Indonesian rupiah (USD/IDR), Indian rupee (USD/INR), South Korean won (USD/KRW) and the Taiwan dollar (USD/TWD). Each of these currencies has its own economic characteristics and often serves as an indicator of sentiment in its respective region. That is why trading them can be a valuable addition to any trader’s strategy.
Take Brazil, for instance. The country’s economy is largely dependent on commodity exports – oil, iron ore, soybeans. The real is known for its high volatility, reacting sharply to movements in global commodity prices and domestic political developments. Trading the USD/BRL pair allows speculating on these swings, which are often far more dynamic than movements in the majors. At the same time, all settlements are made in US dollars, which eliminates conversion issues.
Another striking example is the Chilean peso. Chile is one of the world’s largest copper suppliers, and USD/CLP dynamics are directly linked to global demand for this metal. For traders monitoring the industrial cycle and copper price trends, this pair serves both as a natural hedge and as a speculative opportunity.
The Colombian peso is also tied to commodity exports, particularly oil. The USD/COP pair reflects reactions to global oil prices and domestic political shifts. Investors and traders use it to play on changing sentiment across Latin America.
In Asia, one of the most interesting instruments is the Indonesian rupiah. Indonesia’s economy continues to show stable growth yet remains sensitive to fluctuations in capital flows and changes in global interest rates. The USD/IDR pair allows traders to speculate on these movements, while access through CFDs saves them from the complexities of direct participation in the Indonesian market.
The Indian rupee holds a special place. India is one of the world’s largest emerging economies, and USD/INR dynamics are closely linked both to internal reforms and to global processes – including the monetary policy of the US Federal Reserve. The ability to trade this currency through CFDs opens up a path to strategies that view India as one of the future centres of global growth.
The South Korean won is also among the NDF instruments. South Korea has a highly technological, export-oriented economy, and KRW exchange rates are sensitive to global demand for electronics and automobiles. The USD/KRW pair offers trading opportunities based on both macroeconomic trends and local fluctuations driven by policy changes at the Bank of Korea.
Finally, the Taiwan dollar. Taiwan is a global leader in semiconductor production, and USD/TWD movements reflect not only local factors but also global trends in the high-tech sector. Given the increasing importance of technology to the world economy, trading this currency has become especially relevant.
Thus, the NDFs as CFD format combines the liquidity of USD-denominated settlements with the flexibility of contracts for difference, giving traders access to segments previously limited to a narrow group of participants. This is its key advantage: the market becomes broader, and the opportunities more diverse.
For XFINE clients, this means an expanded range of instruments, diversified trading strategies, and access to new sources of volatility. With proper risk management, currencies such as the Brazilian real, Indian rupee, or Taiwan dollar can offer no less potential than the classic majors.
