IG warns of possible significant moves in end-year FX swap rates

Maria Nikolova

This has been observed across the market, although some pairs are likely to be worse affected than others (most notably if one is shorting US dollars).

Electronic trading major IG Group Holdings plc (LON:IGG) is warning traders of likely significant moves in end-year FX swap rates.

Traders are advised to be aware that due to year end market factors IG is seeing significant moves in the funding rates for most FX pairs. This has been observed across the market, although some pairs are looking to be worse affected than others (most notably if you are shorting US dollars). These factors include financial institutions balancing their books before the end of the year, putting a strain on certain currencies.

Funding rates for FX pairs can be extremely volatile, resulting in one’s daily funding adjustments being much higher than normal. To the best of IG’s knowledge this will affect JPY crosses held past 10pm on the 26th December, CAD crosses and USDTRY positions held past 10pm on the 28th December, and most other pairs including gold and silver held past 10pm on the 27th December.

As an example, for a normal 2-day roll charge on EURUSD traders would receive 1.7pts for a short position and pay 1.79pts for a long position (+/- IG’s admin charge). Current rates are indicating receiving/paying 6 times these amounts should traders hold their positions through year end snapshot dates, but these rates can change.

All things being equal, the FX tradeable price should adjust to reflect these rates but the IG team notes this is out of the company’s control. The funding rates shown on the platform are indicative and subject to change.

Based on client feedback IG have added overnight funding charges to the platform. Traders are advised to keep in mind that they are indicative figures. These swap rates are viewed from a watchlist. Once traders have an FX pair on the watchlist, by clicking on the three lines that are positioned on the left-hand corner next to the word ‘market’, a drop down of columns will appear. Click on the swap bid and swap offer buttons to activate them.

You can find out more about FX swap bid/offer by visiting this page.

Read this next

Digital Assets

US Treasury official clarifies stance on crypto mixing services

The Financial Crimes Enforcement Network (FinCEN) proposed a rule last year to classify convertible crypto mixing as a “class of transactions” with primary money laundering concerns.

Fintech

Robinhood sweetens US crypto offering with trading API

Robinhood has launched a cryptocurrency trading application programming interface (API) for users in the United States. The new API caters to seasoned crypto traders by enabling automated trading strategies, allowing users to react quickly to market movements and trends.

blockdag

After Retik Finance’s 67% Drop, Investors Turn to BlockDAG’s 30,000x ROI Potential to Recover Their Losses

Explore how BlockDAG’s $37M presale is drawing investors while Retik Finance collapses to $0.403.

Digital Assets

Terraform Labs and co-founder Do Kwon reach settlement with SEC

Terraform Labs and its co-founder Do Kwon have reached a “settlement in principle” with the U.S. Securities and Exchange Commission (SEC) regarding a fraud case, according to a court filing on Thursday.

Market News, Tech and Fundamental, Technical Analysis

FTSE 100 Index Technical Analysis Report 30 May, 2024

FTSE 100 Index can be expected to rise further toward the next resistance level 8325.00, which reversed the price earlier this month.

Chainwire

Sui and Atoma Bring the Power of AI to dApp Builders

The integration of Atoma adds new capabilities to Sui’s flourishing developer ecosystem with unique AI-querying capabilities.

Digital Assets

Talos incorporates DeFi with Skolem acquisition

Talos has acquired Skolem to enable clients to incorporate DeFi into their workflows in a move that sets a new standard for the digital asset OEMS and PMS.

Reviews

Ramp Network Deepens Local Presence by Introducing Payouts in Over 35 National Currencies and Instant Bank Payouts in Europe

Ramp Network expands its reach with new payouts in over 35 national currencies and introduces SEPA Instant bank transfers in Europe, enhancing crypto-to-fiat conversion options for users globally.

<