Dukascopy Bank also hikes min margin on GBP pairs concerned with expected market volatility

Dukascopy Bank also hikes min margin on GBP pairs concerned with expected market volatility

- in All News, Forex Brokers
UK

Swiss forex bank Dukascopy Bank has joined its peer forex brokers in temporarily increasing margin requirements to 3.3% for currency pairs containing the British pound (GBP) as the UK referendum nears, a company notice indicated on Tuesday. In addition, the margin on contracts for difference (CFDs) on the GBR.IDX index will also go up to 10%.

The temporary margin will come into effect on 22 June, 2016, and will be removed with the opening of the market on 26 June. However, if the markets are highly volatile, the broker will extend that period.

The UK will hold a referendum on 23 June, to decide whether the country should exit the EU (aka Brexit) or remain in the union (aka Bremain). Both scenarios are highly likely, considering the on-going voter turnaround, and experts are not certain of the possible outcome of the referendum. Speculations and referendum pollings have already had a sensible impact on the markets, making them more volatile.

Also on Tuesday, ActiveTrades announced it will increase the minimum margin on several GBP pairs, as well as some UK indices and CFDs on UK-relates instruments. Three other major UK brokers – FXCM, Oanda and IG Group, are also set to increase GBP margins. FxPrimus, Invast Global, Z.com Trade and JustForex are others to increased their margin requirements for GBP pairs, due to possible hike in market volatility in the weeks prior and after the referendum. Meanwhile, others like One Financial Markets, FxPro, and Saxo Bank have alerted investors to the expected risks, but have not taken any precocious measures regarding trading conditions, at least not as of now.

Meanwhile, ThinkForex is the only forex broker so far to increase margins on GBP pairs.

Brokers are not the only market participants concerned with the upcoming vote. In mid-May, the Cypriot regulatory body, the CySEC, issued a notice addressed towards Cyprus Investment Firms (CIFs), which it oversees, requesting from them to take precocious measures in regards to the the possible exit of the UK from the European Union.

Whatever the outcome of the UK referendum, it would surely have a strong impact on the sterling pound, although at this point it is not certain whether in the long-term that would be a positive or damaging effect. The UK referendum is among if not the most important political event this year. Many experts refer to it as having historic significance.

According to the latest data from IG Group’s EU Referendum Barometer, which was published on Monday, the share of the broker’s clients who believe that the UK will remain in the EU has went down to 69%, compared to 81% as reported on 25 May. Respectively, those who expect the country to leave the EU have increased to 31% from 19%.

Dukascopy Bank, set up in 2004, is based in Switzerland’s Geneva and operated globally through offices in Zurich, Riga, Kiev, Moscow, Kuala Lumpur and Hong Kong. It is licensed as a bank and as a securities dealer by Switzerland’s Financial Market Supervisory Authority (FINMA). The company owns 100% in brokerage Dukascopy Europe IBS , e-payments provider Dukascopy Payments, both based in Latvia, as well as Japanese broker Dukascopy Japan K.K., formerly Alpari Japan K.K.

Source: Dukascopy Bank

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