XM.com will be implementing margin changes on all Swiss franc (CHF) pairs in anticipation of possible action out of the Swiss National Bank (SNB) – the changes will help protect clients from any broad changes to the Swiss currency’s value.
On Monday March 20, 2017, XM.com will alter its margin requirements on all CHF pairs, including mandating a margin requirement that is two times the margin set as per account leverage. Previously this was set to four times the margin set as per account leverage – the new improved margin requirements for pairs including CHF will apply to both new and existing positions.
The changes come at a time when the SNB could embark on a move to potentially cut its interest rates – by extension, it could also ramp up its currency purchases to help mitigate the Swiss franc’s value. This sentiment was echoed by the SNB’s Chairman Thomas Jordan earlier this week.
An additional layer of uncertainty applies to the Swiss franc, given its status as a safe haven currency, as elections forthcoming in both Italy and Germany remain interesting developments that could trigger more volatility on the continent. The SNB’s status as a wildcard also rings true given its history and snap decision-making that caught currency markets off-guard over two years ago.