FXCM to Stop Trading in Several Currencies
Legendary Foreign-exchange broker FXCM Inc. will bring to an end trading several currencies afterward this week to avoid volatility caused by likely future intervention by governments in currency markets, according to a person familiar with the matter.
FXCM broker, based in New York, lost millions of dollars following the sudden currency swings resulting from the Swiss National Bank’s decision to remove its cap on the value of the franc on January 15. It has started notifying clients that on February 20 it will stop trading for a number of currencies, including the Danish krone and Hong Kong dollar, from its clients, the person said.
“We are taking off few currency pairs from the platform that hold significant risk because of overactive manipulation by their respective governments either by a ceiling, floor, peg, or band,” said the firm’s chief executive Drew Niv.
So as to continue operations, FXCM secured a $300 million loan from Jefferies Group LLC-parent Leucadia National Corp.
Under the changes, excluding major currencies, FXCM will only offer trading in the South African rand, the Turkish lira, and the Chinese renminbi. It will also increase the margin requirements that clients will have to pay to trade in these currencies.