Swiss brokerage Dukascopy has announced that it is limiting the trading leverage it provides on the Chinese yuan to 1:10 - sound familiar?
Swiss brokerage Dukascopy has announced that it is limiting the availability of leverage to its clients that are trading the USD/CNH currency pair. The maximum amount of leverage which clients of the Swiss brokerage are going to be able to use is 1:10. The news comes almost a year after the notoriously infamous collapse of the Swiss franc peg.
While it may not seem apparent, the underlying fundamentals of the Chinese yuan are somewhat similar to the Swiss franc in January 2015. The Chinese central bank has been facing increased pressure to float the Chinese yuan exchange rate. Currently the USD/CNH currency pair, which is representing the offshore rate of the Renminbi, is largely a managed float.
Dukascopy highlighted in its announcement that high volatility and the probability of low Liquidity on USD/CNH currency pair could result in significant price gaps, which may cause negative equity on client accounts.
The changes are affecting clients of both Dukascopy Bank and Dukascopy Europe from the 15th of January 2016 at 11:00 GMT.
While some analysts have been vocal about the Central Bank of China being forced to float the Renminbi exchange rate sooner or later, for now this move remains outside of the radar of central authorities in Beijing.
With the announcement coming merely a year after the Swiss franc peg collapsed, this approach by Dukascopy is highlighting the additional risks that traders are assuming when trading currency pegs. While the Chinese yuan rate is a managed float, the government is in tight control of the direction of the market.
With increasing capital outflows, the Renminbi’s rate could be free floated in the near future, resulting in substantial volatility on the currency markets. The move by Dukascopy mimics the moves of some brokers last year that have increased margin requirements on currency pairs including the Swiss franc months before the Black Swan event on January 15th 2015.
Swiss brokerage Dukascopy has announced that it is limiting the availability of leverage to its clients that are trading the USD/CNH currency pair. The maximum amount of leverage which clients of the Swiss brokerage are going to be able to use is 1:10. The news comes almost a year after the notoriously infamous collapse of the Swiss franc peg.
While it may not seem apparent, the underlying fundamentals of the Chinese yuan are somewhat similar to the Swiss franc in January 2015. The Chinese central bank has been facing increased pressure to float the Chinese yuan exchange rate. Currently the USD/CNH currency pair, which is representing the offshore rate of the Renminbi, is largely a managed float.
Dukascopy highlighted in its announcement that high volatility and the probability of low Liquidity on USD/CNH currency pair could result in significant price gaps, which may cause negative equity on client accounts.
The changes are affecting clients of both Dukascopy Bank and Dukascopy Europe from the 15th of January 2016 at 11:00 GMT.
While some analysts have been vocal about the Central Bank of China being forced to float the Renminbi exchange rate sooner or later, for now this move remains outside of the radar of central authorities in Beijing.
With the announcement coming merely a year after the Swiss franc peg collapsed, this approach by Dukascopy is highlighting the additional risks that traders are assuming when trading currency pegs. While the Chinese yuan rate is a managed float, the government is in tight control of the direction of the market.
With increasing capital outflows, the Renminbi’s rate could be free floated in the near future, resulting in substantial volatility on the currency markets. The move by Dukascopy mimics the moves of some brokers last year that have increased margin requirements on currency pairs including the Swiss franc months before the Black Swan event on January 15th 2015.
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Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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