Forex.com Raising Margins on EUR Pairs Ahead of German Elections

Once again this year, markets will be dialed into European elections, this time regarding one of the largest players in the bloc, Germany. Consequently, ahead of the September 24 elections, Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term.com will raise minimum margin requirements in an attempt to protect clients against potential Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term.

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The German elections this month will see Angela Merkel battling for the CDU/CSU to obtain a majority – however with an estimated 46 percent of Germans still undecided there remains the potential for a variety of different outcomes.

Taking no chances ahead of previous electoral outcomes, Forex.com will be safeguarding clients with new margin requirements starting on Thursday September 21, lasting until Tuesday September 26, 2017.

With the EUR/USD in central focus leading up to and during the elections themselves, the margin requirement changes will affect all EUR forex pairs, including the EUR/USD – these pairs will see an increased minimum margin requirement to 1.0 percent. As the largest player in Europe, any electoral surprise could hold sizable consequences for the single currency.

Additionally, other instruments such as contracts-for-difference (CFDs) GER30 and FRA40 are also seeing their margin requirements increased to 1.0 percent starting next week on September 21. Each of these instruments represents the paramount benchmark index for the stock markets in Germany and France respectively.

Holding positions over the weekend is already risky enough due to concerns from geopolitical and global events that can take place when markets are closed. The margin increases reflect Forex.com’s attempts to avoid any potential fallout for their retail clients, which could potentially lead to significant profit/loss scenarios for unprepared investors.