The next big vote in Europe will occur this weekend, with Italy poised to vote in a referendum that could ultimately hold consequences for the global foreign exchange (FX) markets and more specifically the EUR. On Sunday, December 4th the Italian referendum will be held, which has already resulted in several brokers to altering trading conditions ahead of the event – XM.COM has become the latest broker to alter its margin requirements in anticipation of potential volatility.
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The changes are similar in nature to efforts adopted by other brokers throughout the week, which have initiated leverage thresholds and other changes in anticipation of potential widespread volatility. 2016 has had no shortage of volatile events, such as the Brexit referendum and the US election, each of which resulted in unexpected outcomes.
EUR Pairs in Focus
The Italian referendum this weekend is not guaranteed to trigger any major market moves, however the prevailing of a ‘no’ vote could be the catalyst that would put Italy on a path out of the European Union – an outcome that would have an enormous consequences for the EUR.
As such, XM.COM will be implementing multiple margin changes on December 2nd at 10:00 p.m. server time (GMT+2) – the changes will however affect both new and existing positions and will be restored to default levels on Monday December 5th. Consequently, the following alterations will be made:
- 1% (100:1 leverage) for EUR-denominated currency pairs, gold, and silver
- 3% (33:1 leverage) for all CFDs on equity indices and commodities