Today, OANDA Japan, an online trading services provider, announced that it will adjust the margin requirements for eight currency pairs within its offering. This change, according to the announcement, will come into effect on the 10th of August, 2020.
Decreasing Margin Requirements
The trading pairs affected are as follows: CAD/JPY, GBP/JPY, GBP/EUR, GBP/USD, GBP/AUD, AUD/CAD, CAD/GBP, and GBP/NZD. It should be noted that these trading pairs are trading on two platforms: fxTrade (NY Server) and OANDA Japan FX Tokyo Server.
In the past, the margin requirements for the trading pairs mentioned above were 3%. Now, however, as volatility and overall uncertainty starts to diminish, they have eased it back to 2%. However, OANDA Japan warned that customers must be prepared to adequately fund their respective accounts. Depending on the market conditions, OANDA Japan warned that it might implement further changes to its margin rates, and is subject to the market conditions going forward.
Tight-Lipped As To Why Requirements Changed
The specifics as to why OANDA Japan has opted to revise its margin trading isn’t made clear. The only apparent explanation the broker gave, is that this move is reflecting the current situation within the market. However, the broker opted to refrain from detailing what specific market factors prompted it to revise the margin requirements, in particular.
It was back just when the COVID-19 pandemic first barrelled through the world when OANDA Japan tightened up the margin requirements on an entire array of trading pairs. During the spring of 2020, OANDA Japan adjusted margin rates for a variety of currency pairs as overall volatility and uncertainty in the market rose to incredible heights.
COVID-19 And Market Volatility
In particular, OANDA Japan increased the margin requirements for AUD/CAD, AUD/SGD, as well as the CAD/JPY back in April, with May seeing an increase in margin rates for the CHF pairs. This was due to massive volatility in select currencies as traders across the world started selling to have liquidity available in these uncertain times.
Now, however, barring a few exceptions, the world is slowly starting to get this pandemic under control. Africa and the US, for the most part, are still struggling to reign it in, with neither of these regions looking like they’ll get it under control any time soon. In the meantime, the rest of the world is slowly trying to adapt to this new pandemic-infused world. At least, this will be the case until a proper vaccine is developed.