On Thursday, 15th January 2015 Thomas Jordan, President of the Swiss National Bank ("SNB") declared that he was scrapping the cap of the Swiss Franc against the Euro after the three-year deal was coming to an end. This has caused chaos in the forex markets, capturing many traders and institutions with their pants firmly round the ankles. It was a sudden announcement which no one could have expected.
The Swiss Franc surged up to 41% against the Euro.
We're going to keep updating this post with the most recent news of the SNB's decision. We can see over time it's taking more prisoners along with wiping out businesses.
Currency transfer companies such as Travelex, HiFX and CaxtonFX which allow customers to exchange currency or transfer cash overseas to order rather than offering customers trading accounts said they were unaffected.
- President announces the end of the relationship between Switzerland and Europe.
- AlpariUK stated they had not formally entered into insolvency.
- Alpari has announced that eight CHF currency pairs will be traded in “close only” mode so traders will not be able to open any new positions or place pending orders.
- IG Index (IG Group) has lost approximately £30m as reported by Bloomberg.
- FXCM reports losses of approximately $220m from their $1.2bn assets.
- FXCM has been reprieved from its $225 million shortfall caused by heavy losses during Thursday’s CHF moves by Leucadia National Corporation, which has agreed to provide $300 million in cash to FXCM and its subsidiaries. It will be given to FXCM in the form of a $300 million senior secured term loan with a two-year maturity and an initial coupon of 10%. as reported by profit-loss.com.
- Marko Dimitrijevic said he was going to close his largest hedge fund, Everest Capital’s Global Fund. The fund managed $830 million in assets. His other seven funds are still managing $2.2 billion in assets.
- Three banks - Citi Group, Deutsche Bank AG and Barclays Plc are estimated to have currently lost around $400 million. The total figures are still being tallied up and could run into the billions as reported by Bloomberg.