Dukascopy Bank and its arm Dukascopy Europe will reduce the maximum leverage on currency pairs with the Danish krone to 1:10. The changes will be effective as of February 8, 2015 (Monday) and will affect positions with EUR/DKK (Euro vs Danish krone) and USD/DKK (US dollar vs Danish krone), the company said in an announcement.
The company attributes the change to “the possibility of recalibration of the trading range of EUR/DKK which may lead to significant price gaps and cause negative equity on client accounts”.
Denmark’s national bank (Nationalbanken) has been taking action to weaken the Krone in order to maintain its peg – the watchdog sold record amounts of Krone during the month of January. The bank is obviously trying to avert “Black Swan” events.
Dukascopy is not the first retail Forex broker to axe leverage on DKK pairs lately – over the past couple of weeks we have seen other companies adopt similar measures too. Forex.com (GAIN Capital’s retail Forex brand) also announced a reduction of maximum leverage on instruments with Danish krone to 1:10 earlier this month.
You can read the official announcement by Dukascopy here.