Online Forex and CFDs broker, DMM FX Australia, has just announced it is moving to offer what the company calls "Ultra-Low Fixed Spreads" on all of its avilable 29 currency pairs, including the most popular ones in the 'Land down Under': AUD/USD, EUR/USD & USD/JPY.
The new offering isn't completely fixed as the name suggests, but actually DMM FX says its new low spreads are fixed over 99% of the time during normal trading hours but spreads may widen during volatile market conditions, such as news releases.
DMM FX CEO, Koji Miura, commented on his firm's recent trading incentive: ‘’DMM FX clients will experience our lowest fixed spreads ever, from 0.5 pips, on all pairs, even our majors are fixed. Along with ultra low fixed spreads, traders with DMM FX now have the choice of 200:1 and 600:1 leverage for additional trading options. We have also introduced Micro Lot trading for our clients. As Australia is preparing for the Melbourne Cup in November, DMM FX traders have already scored the trifecta. Our tightest fixed spreads deliver certainty, freedom to choose between leverage ratios and finally the option of trade size, however small or large.’’
The move by DMM FX can't avoid being seen as a reaction to FXCM's announcement made last week when it switched to a raw spreads model promising to lower trading costs by 50%. This raises the question: Did FXCM start a new price war between brokers in Australia and how low can profits go if brokers are forced to compete on spreads? Just as Volatility is finally picking up it looks as if a new threat to earnings is emerging but the combination of the two factors will likely lead to new volume records.
