EU and Australia-regulated forex broker XM said it is raising the margin requirements on the EUR forex pairs in the CFDs on European equity indices due to the upcoming election for parliament in France.
According to the broker, the election, which takes place on June 11, will possibly lead to extreme market volatility, thin liquidity, abnormal spreads and price gaps in many currency, commodity and stock markets globally.
For this reason, starting from 18:00 p.m. server time (GMT+3) on Friday, 9th June 2017, the margin required for all positions (for opening new positions and for maintaining existing positions) will be temporarily increased to:
- 0.5% (200:1 leverage) for all EUR currency pairs
- 2% (50:1 leverage) for all CFDs on European equity indices.
After the announcement of the results on June 12, the trading conditions will be reverted to normal, depending on the client account settings.
So far, XM is the only broker that makes such changes ahead of the French elections. Most likely it will remain the only one, or one of the few, as public opinion polls almost unanimously show a clear victory for the new centrist party of French president Emmanuel Macron. This likely will not result in significant market turmoil, especially considering that all eyes are now trained on the snap general election in the UK.