New York-based retail broker FXCM Inc said on Wednesday it will temporarily increase margin requirements to 2 percent from 1 percent for certain currency pairs starting Friday afternoon in anticipation of market volatility ahead of next week's US presidential election.
FXCM said in a statement the company will reduce margin requirements back to pre-election levels as soon as market conditions allow. Margins are deposits required to maintain open currency positions.
Thirteen currency pairs will see higher margins of 2 percent from Friday including euro/dollar, dollar/yen, sterling/dollar, and US dollar/Canadian dollar.
The US dollar/Mexican peso's margin requirements will rise to 10 percent from 4.6 percent, the dollar/Swedish krona margin will increase to 6 percent from 3 percent, while that of the dollar/Norwegian krona will move to 3 percent from 1.5 percent.
The new margin levels will take effect after 5 p.m. EDT (2100 GMT), FXCM said.
Early last year, FXCM and other brokerages were famously hit hard by the Swiss National Bank's sudden move to scrap its cap on the value of the Swiss franc against the euro.
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