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Saxo Bank will this evening announce to its clients the result of a decision made by its Board of Management that the margin on Swiss Franc (CHF) will be raised to 8%.
Explaining the reasoning behind this move to LeapRate today, the company stated that there has been increased pressure on the 1.2000-1.2050 EUR/CHF peg with the spot market leaving the 1.2150-1.2250 range where it has been for most of 2014, and making a low of 1.2050 on 28 August. The build-up of short CHF positions in the broader market could, as Saxo Bank views it, represent a large risk should the 1.2000 peg give way.
As such, Saxo Bank believes that any breach of the 1.2000 peg could see a significant appreciation of CHF. Thus, the margin on CHF will be raised to 8% on Monday, 8 September, 2014 at 15.00 CET in order to reflect potential increase in risk and protect Saxo Bank clients.
The company has confirmed that although this was not an easy decision, it was a necessary one and that other firms have not yet followed suit, a matter which Saxo Bank considers to be a moot point.