Following the move by Saxo Bank earlier this month to increase the leverage on all currency pairs including the Swiss franc, the leverage level on positions in the EURCHF pair traded on Forex.com’s FOREXTrader PRO platform is now set to increase to 5% (1:20). The increasingly high risk associated with the one-sided exposure of retail market participants is forcing another company to change its leverage policy towards the Swiss franc peg to the euro.
The EURCHF currency pair has a floor set by the Swiss National Bank (SNB) which aims to keep the safe haven currency from appreciating below 1.2000. The floor has been in place since September 2011 and currency traders have been keen to hold long positions on the euro, expecting the SNB to intervene in case the floor level is approached.
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There is little change in the positioning data at other major brokers, since we last mentioned it in our coverage of the even more aggressive move by Saxo Bank to reduce leverage to 8% (12.5:1). The move has helped reduce the exposure of clients substantially with the long euro positions against the Swiss currency totaling 72.2% – down from 85.8%.
Exposure of OANDA’s clients for example, is still quite high totaling 87.3% sitting long on the EURCHF.