GulfBase Live Support
Leave a message and our representative will contact you soon
09/11/2016 05:32 AST
Major banks have formally told clients to expect volatile currency markets in the aftermath of Tuesday’s US presidential election, with the gap between buying and selling prices that determines the cost of trading expected to widen sharply if Donald Trump were to win.
The warnings issued by the electronic trading platforms run by the market’s largest player Citi and rivals Barclays and Goldman Sachs, seen by clients of the banks, have over the past two years become standard ‘red flags’ ahead of big political and economic set-pieces.
But issued broadly for the first time since Britain’s vote to leave the European Union in June, they are also a measure of the scale of risks being attached to Tuesday’s vote.
Banks have forecast falls of up to 5 percent in the dollar’s value against the yen if Trump were to win and a bounce of 1-2 percent for the greenback on a victory for Hillary Clinton.
A number of retail currency trading platforms have also already raised margins clients must hold against open currency bets for fear of sharper moves in the dollar and Mexican peso. One Goldman Sachs client said the bank told clients on Monday it would not accept new stop loss orders on the peso until further notice.
Citi and Goldman Sachs declined to comment.
Barclays said: “Barclays is always available for clients during macro events, providing extra staffing in London, New York and Singapore ensuring 24 hour coverage to monitor markets and handle client trades throughout US election night.”
The head of trading with one large London-based investor, a client of Barclays and Citi, said both had issued formal warnings in line with standard procedure since the sudden and dramatic surge in the Swiss franc in January of last year.
“It is very polite and seems like just a box-ticking exercise really: as you are probably aware markets may be more volatile, expect thinner liquidity and wider spreads. It has clearly become the legal norm to do this,” the head of trading said.
A second client of several of the larger banks confirmed he had seen such warnings.
“On the Citi system they are just a pop-up. On Barclays it is an e-mail,” a second source said. “Similarly to the action we saw ahead of Brexit, Goldman also told us they would not accept stop loss orders on the peso as of 3 p.m. yesterday.”
Arab News
Ticker | Price | Volume |
---|---|---|
SABIC | 114.77 | 5,915,941 |
SAMBA | 26.98 | 1,138,683 |
DARALARKAN | 13.47 | 74,648,349 |
US Dollar | 1.00 |
Saudi Riyal | 3.75 |
Derham Emirati | 3.67 |
Qatari Riyal | 3.65 |
Kuwaiti Dinar | 0.30 |
Bahraini Dinar | 0.38 |
Omani Riyal | 0.39 |
Euro | 0.81 |
British Pound | 0.71 |
Japanese Yen | 104.70 |
05/04/2018
Oman has the means to maintain its currency peg and has no plans to change it even though the decline in oil prices has hurt its finances, central bank Governor Tahir Al Amri said.
Oman’s g
Gulf News
02/04/2018
China’s yuan firmed against the dollar on Friday and is set to post its biggest quarterly gain in a decade, as the country attracts capital inflows and US trade frictions bolstered expectations of a
Gulf News
01/04/2018
The US dollar’s share of currency reserves reported to the International Monetary Fund declined in the final quarter of 2017 to a four-year low, as other currencies’ shares of reserves grew, data rel
Gulf News
29/03/2018
The US Dollar Index, a measure of the value of the US dollar against a basket of currencies, teetered and dropped to quarterly lows in March, which also happen to be the lowest the index has been sin
The National
29/03/2018
Turkey’s lira weakened beyond the psychologically important level of 4.0 to the US dollar yesterday, bringing it close to a record low, as concerns about double-digit inflation, and politics, continu
Gulf Times