Euronext.liffe last month overtook the Singapore Exchange for the first time in eurodollar futures trading volumes, six months after the London-based exchange launched its contract.
The eurodollar, the most heavily traded futures contract with a notional value of $1,600bn a day, is used by investors to hedge against interest rate changes. More than 97 per cent of the trading takes place on the Chicago Mercantile Exchange.
Euronext.liffe traded 605,000 contracts in September, compared with 365,000 in Singapore. The CME traded 32m contracts.
Amanda Sudworth, Euronext.liffe's director of fixed-income product management, said that the US was proving a prime source of new customers.
"It's not surprising, as this is a US dollar-denominated product," she said. About a third of the trading is in the London morning and two-thirds in the afternoon [when US markets open]."
Euronext.liffe hopes to glean new users among those already using its Euribor contract, a European version of the eurodollar.
Complex transactions involving spreads between two or more contracts account for increasing amounts of trade on derivatives exchanges.
"We have a great system dedicated to trading this type of product," Ms Sudworth said.
Eurodollars are dollar- denominated time deposits outside the US. The eurodollar futures contract reflects investor expectations for US interest rates in three months' time. Euribor does the same for European interest rates.
Singapore's SGX exchange has been losing eurodollar business as the CME shifts trading to its electronic platform Globex, to help meet the Euronext.liffe challenge .
The CME has increased monthly eurodollar trading more than 50 per cent over the last year, with the electronic share going up from less than 5 per cent of the total to 66 per cent.
SGX's contracts are floor traded and not allowed to be offered electronically, although SGX gets a fee for each Globex trade during Singapore trading hours.
When eurodollars were launched in the 1980s on the CME, London introduced a rival contract, but it failed to attract liquidity and was withdrawn.
CME's deal with Singapore in 1984, which allowed trades conducted during Asian hours to be cleared in Chicago, helped crush the London product. But the advent of electronic trading has given Euronext.liffe a second opportunity.
In terms of open interest - contracts that have yet to be completed - London and Singapore have been see-sawing, with both reporting figures of about 100,000 in recent weeks. Currently, it is 85,000 on Singapore and 97,500 on Euronext.liffe.