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Screenshot of a breaking news alert e-mail from Q2 2017
Just a day after the European Central Bank President Mario Draghi’s announcement that the European Central Bank plans to spend €60 billion ($70 billion) a month for at least 19 months, adding hefty purchases of government bonds to an existing scheme to buy covered bonds and asset-backed securities which currently rank at around €10 billion-worth a month, it appears that brokers are responding to the Danish central bank’s announcements instead of taking swift action regarding the Euro.
Denmark’s central bank signaled yesterday that it is ready to step up currency interventions and continue cutting rates to stamp out any lingering speculation that it may be unable to defend its euro peg.
Earlier today, Australia’s AxiTrader announced that it would be ceasing trading on the HK Dollar and the Danish Krone, a move that has now been followed by fellow Australian FX brokerage Pepperstone.
Pepperstone’s announcement states that the company’s liquidity providers have informed the firm that they are no longer able to provide liquidity on pegged currency pairs (DKK and HKD).
The company states that this action is due to the volatility from the SNB announcement on the 15th of January, and is to avoid any issues in the event of a change in policy, however with Denmark’s central bank preparing to dump Krone onto the market, liquidity providers may be safeguarding themselves in advance.
For the official announcement from Pepperstone, click here.