Interdealer broker Icap will launch decimalised pricing on major currency pairs on EBS Spot on February 14, the broker told FX Week. Pricing in EUR/USD, USD/JPY, EUR/JPY, USD/CHF, EUR/CHF will move to a tenth of a pip, bringing it in line with market convention and leaving Thomson Reuters the only broker yet to do so. Icap first embarked on the initiative in September last year, when it extended decimalised pricing to Australian dollar crosses (FX Week, July 26, 2009). David Rutter, deputy head of the electronic broking business at Icap in New York, said the move is aimed at giving traders more competitive pricing over the platform and via aggregation systems. “From our perspective, we appreciate any efforts by any of our vendors to increase the granularity of pricing within the market. The reality is that it is an inevitable move for them and practically every other platform has already done it,” said Simon Jones, head of spot trading at Citi in New York. Jones added that decimalisation is unlikely to affect Citi’s single-dealer platform, which to date has come in within the EBS pricing 95% of the time. “We think we have a different offering to what they do. Theirs is a matching engine while we can guarantee you an amount at a particular price point for no brokerage fee,” said Jones. “Ultimately this should reduce our hedging costs because potentially the spreads will be narrower.” “I don’t really see a sudden move to everyone quoting point one wide in 10 euros. I do think you’ll see what you see on other ECNs where there will be one euro in front of a 10 euro order point one better,” he said, which will be frustrating for some users. However, a senior trader in London questioned whether EBS Spot has the technological ability to deliver the increased volumes that will arise from the move. “EBS struggles a bit on very high volume times, and this is about to significantly increase that. We’re not completely sure how much they’ve put into that,” the trader said. Read more articles like this one at FXWeek.com...
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