Hedging for Corporates

Managing FX exposure presents challenges and opportunities for Corporates

We have therefore designed tailored FX Hedging Strategies for Corporates with FX & PM exposure > 4mio USD monthly volumes.

Our FX Hedging for Corporates offers the following value proposition for each Investor:

  • Improve FX P&L by reducing substantially FX transaction fees and improving FX buy and sell rates
  • Reduce P&L Volatility for overall Corporate
  • Minimize FX induced costs by pre-fixing FX forward conversion rates
  • Ensure FX risk management corresponds to Corporate Risk Appetite

Our FX Hedging for Corporates is delivered to each Investor in the following Hedging Strategy Types:

  • Static Hedging: Fixed hedge amounts until maturity
  • Dynamic Hedging: Amounts adjusted in response to market changes
  • Hybrid Approach: Combining elements of both Hedging Strategies

Advantages of Different FX Hedging Strategies

  • Simplicity and Predictability: Relatively straightforward and provides a predictable exchange rate
  • Moderate Decision-making Overhead: Requires few hedging decisions and no continuous monitoring
  • Low Transaction Costs: Involves relatively few trades with low transaction costs
  • Consistency: Ensures a consistent approach to managing currency risk, suitable for companies with conservative risk management policies
  • Flexibility: Respond to changing operating needs and market trends
  • Adaptability: React in real-time to market developments, economic factors, and currency forecasts
  • Active Risk Management: Actively manage currency risk to stay within desired risk tolerance levels
  • Additional Return Potential: Benefit from currency movements, potentially increasing overall returns
  • Combining the advantages of Static and Dynamic FX Hedging
  • Better alignment with Corporate’s risk appetite, exposure objectives and financial goals

Case Study