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January 8, 2016 | Margin Requirements Double on Yuan Currency Trades; China Recap

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

As volatility increases, so do margin costs. Consider this image of an email from FXCM forwarded by reader Jacob.

click on image for sharper view

The margin on Yuan (CNH) on Forex has doubled from $50 to $100, the most of any currency pair. The Hong Kong Dollar (HKD) also trades at $100 margin.

For comparison purposes, margin on euros is $26. Margin on Swiss Francs (CHF) is $97.50, no doubt reflecting the surprise peg drop by the Swiss central bank.

Here is the Complete List mentioned in the above image.

FXCM wants to be prepared in case of another sudden Yuan devaluation.

China Recap

Mike “Mish” Shedlock

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January 8th, 2016

Posted In: Mish Talk

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