After chaos hit the markets as a result of Swiss National Bank’s decision to scrap the 1.20 per euro floor which was set over three years ago, volatility surged as fortunes could have been made or lost in the markets.
The immediate reaction was a sharp 30% plunge in the value of the Euro against the Swiss franc. Gain capital’s Forex.com seems to be the first big name broker to suspend trading on the currency due to lack of liquidity from liquidity providers.
Kathleen Brooks, research director at Forex.com:
“We’re just waiting for our liquidity providers to come back and say they will provide liquidity again,” She added that the suspension was temporary.
“It’s very difficult to get liquidity in Swiss francs against anything right now. The whole market has dried up,” she said.
This is similar to a situation that occurred a few weeks back when the Russian central bank hiked benchmark interest rates to 17% causing many brokers to halt trading on the rubble.
As the fear of a Greek Exit also rises, the Euro seems of be at risk in coming weeks.
From what we see Forex.com is not the only broker suspending CHF pairs, MIG, FXCM, Alpari UK all suspended CHF trading. The following is what we received from FXCM regarding CHF trading:
Saxo Bank made an official announcement that executions of trades aren’t final and may be changed following confirmation of pricing with their liquidity providers.
Meanwhile IG markets facing up to £30 million in losses after the SNB 1.20 floor scrap said in a statement that “The precise level of the impact will be partially dependent on the Company’s ability to recover client debts, but in total it will not exceed, from market and credit exposure.”
At this moment IronFX is the only broker among the league of titans which still offers CHF pairs, however this offer is not appealing at this moment as the spread given is very high and also some account types are not featuring CHF pairs.