FXCM raises margin requirements for some FX pairs before U.S. vote

Global Brokerage

02/11/2016 20:24

NEW YORK, Nov 2 (Reuters) - New York-based retail broker 
FXCM Inc said on Wednesday it will temporarily increase margin 
requirements to 2 percent from 1 percent for certain currency 
pairs starting Friday afternoon in anticipation of market 
volatility ahead of next week's U.S. presidential election. 
    FXCM said in a statement the company will reduce margin 
requirements back to pre-election levels as soon as market 
conditions allow. Margins are deposits required to maintain open 
currency positions. 
    Thirteen currency pairs will see higher margins of 2 percent 
from Friday including euro/dollar, dollar/yen, sterling/dollar, 
and U.S. dollar/Canadian dollar.  
    The U.S. dollar/Mexican peso's margin requirements will rise 
to 10 percent from 4.6 percent, the dollar/Swedish krona margin 
will increase to 6 percent from 3 percent, while that of the 
dollar/Norwegian krona will move to 3 percent from 1.5 percent. 
    The new margin levels will take effect after 5 p.m. EDT 
(2100 GMT), FXCM said. 
    Early last year, FXCM and other brokerages were famously hit 
hard by the Swiss National Bank's sudden move to scrap its cap 
on the value of the Swiss franc against the euro  EURCHF= .  
    The SNB move caused the euro to suffer its biggest-ever 
one-day fall against the franc, dropping 18 percent for the 
session and losing some 30 percent on an intraday basis. 
    The company announced in January it lost more than $200 
million as a result of the SNB's action. FXCM eventually got a 
$279 million loan from Leucadia National Corp  LUK.N . 
 
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Alan Crosby) 
 ((gertrude.chavez@thomsonreuters.com; 646-223-6322; Reuters 
Messaging: rm://gertrude.chavez.reuters.com@reuters.net)) 
 
Keywords: FOREX FXCM/ELECTION