Swiss Franc Crisis Claims Another Victim As FXCM Tanks 80%

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Swiss Franc Crisis Claims Another Victim As FXCM Tanks 80%

The number of casualties from the decision of Swiss National Bank to cease capping the nation’s currency is on the rise, and the damage is spreading from New York to New Zealand, with FXCM Inc., the biggest retail foreign-exchange broker in Asia and the U.S., saying it may be in breach of some regulatory capital requirements.

A small New Zealand currency trading house, Global Brokers NZ Ltd., said it would close its doors as it could no longer meet regulatory minimum-capitalization requirements.

SNB ditched its cap on the franc

As reported by ValueWalk, Swiss National Bank stunned the markets Thursday by scrapping its three-year old cap of 1.20 Swiss francs per euro. The central bank said the franc was now out of the period of “exceptional overvaluation” during which the minimum exchange rate had been introduced.

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The SNB’s latest move unleashed new volatility among bonds and currencies around the world. SNB’s abandoning of the cap prompted a collapse of as much as 30% in the euro versus the franc – the biggest single-day move in a developed market that traders could recall.

FXCM Inc (NYSE:FXCM) said in a statement that due to unprecedented volatility in the euro against the Swiss franc, its losses left