Sent: Fri 16/01/2015 9:29 AM
As you will be aware, recent commentary and action by the Swiss National Bank (SNB) has led to an unprecedented move in the value of the Swiss Franc (CHF) leading to interbank liquidity completely drying up overnight. The SNB took the view that direct intervention was no longer an option to keep the EUR/CHF pair above the 1.20 ‘floor’ that had been in place, while also reducing interest rates deep into negative territory at -0.75%.
The unexpected move caused unprecedented activity and accelerated moves, combined with severely-diminished liquidity in all CHF pairs and other pairs as well. In some cases, prices were erratic compared to normal, liquid market conditions. Accordingly, spreads were significantly wider and quotes may have been intermittent leading to slower executions. Whilst many Liquidity Providers and banks stopped quoting, our robust technology, infrastructure and internal systems meant we were able to handle trades with only minimal interruption and continue to offer market leading trading conditions. We also note that there has been no financial impact to the Company due to our robust internal controls.
Due to the nature of the activity, CHF pairs are likely to have slightly abnormal trading conditions in the short term, including slightly wider spreads.
We have also taken the decision to reduce the leverage on all CHF pairs to be 50:1. This change will occur from the opening of trading on Monday 19th January 2015 (09:00 Melbourne/00:00 GMT+2).
Please ensure that you check your margin situation to ensure that you have sufficient margin to maintain existing and open new positions. If you believe that you will have insufficient margin you may need to reduce your exposure or deposit additional funds.
As always, we encourage you to continue monitoring market and economic news and ensure that you maintain appropriate levels of margin, and use extreme caution when deciding on leverage settings and order placement.
Have Questions for ThinkForex?
Our Support team is here for you 24 hours during the trading week, so don't hesistate to contact us on +61-3-9093-3400 or email us at email@example.com
The ThinkForex Team