Corporate treasurers do more than ever before to identify and mitigate risk and to position their companies to weather market crises with confidence. According to Deloitte, 85% of companies are measuring their sensitivity to market risk, but a much smaller portion regularly assess the probability of their risk.
In our last article, we identified a clear risk management objective: certainty. Risk management is really about understanding and managing uncertainty to create more certainty.
They say, “what gets measured gets managed.” So, if you’re not measuring your FX risk, you might not be managing it – even if you think you are.
This article kicks off a new series of posts that will help treasury professionals understand conventional FX risk management practices and how they fit into a successful strategy.
There’s no better way to begin than to ask ourselves, “why do companies bother to use any of these conventional practices?”
Corporate financial history is replete with examples of currency risk and trading management decisions that have backfired on companies.
Consider Toshihide Iguchi, a Japanese banking executive who turned a $70,000 in U.S. debt into a substantially larger debt of $1.1 billion, after making a bet on the U.S. fixed income market in 1983.
There are now many tech products that rely on foreign exchange data for accurate pricing and financial tools and for exchange rate conversions between currencies from around the globe that are updated in real-time.
The need among tech startups to optimize their FX management is clear, and to do so necessitates the access to, and correct use of, powerful, reliable data.
A high amount of SMEs with considerable operations in foreign currencies don't protect themselves against FX risk. These companies, many of which record revenues of around $200 million per year, simply don't approach FX management as there is no specialist in-house FX risk manager. Instead, they expose themselves to the whims of the currency market.
A raft of new geopolitical events, like, among other things, the U.S. tax law reform, a NAFTA exodus, and a Brexit reboot in Europe, could be a taxation game-changer for companies doing business overseas. That's especially the case as a new year beckons.
Overall, the global corporate tax landscape has changed dramatically in the aftermath of U.S. tax reform passed and signed into law at the end of 2017, and as its enactment creates ripples across the globe, even in late 2018.
With NAFTA on the way out after months of intense negotiations, the new United States-Mexico-Canada Agreement (USMCA) trade agreement is coming to fruition soon in advance of a country-by-country vote in a few weeks.
In this article, we focus on the key takeaways for CFOs to get up to speed on the economic impacts for consumers and businesses, the major financial points, and geopolitical implications of the new USMCA agreement.
Treasury departments preparing for 2019 can learn from some key lessons by looking back at 2018 currency movements and wider economic developments.
In this article, we focus on six separate focus areas to help your treasury department hit the ground running in 2019 with a value-added foreign exchange and currency analytics strategy in place.
Between talks of default as Argentina struggles to repay heavy government borrowing, historically high interest rates, and the Argentinian Peso declining 45% against the U.S. dollar, the business risk of working in Argentina is high.
President Mauricio Macri and his pro-business government face an uphill climb in stabilizing the currency and solving its mounting economic problems. Here are the issues that business operating in Argentina need to know.
Continuing the increasing trend of shocking currency developments in recent years, global foreign exchange markets have witnessed drastic events recently.
Join us in this article as we take a look at 3 of the most severe currency devaluations in history—as well one to watch out for—and what businesses can learn to protect themselves from risk.
The Russian ruble is down and the Russian economy isn't faring much better in 2018. At the center of it all stands Vladimir Putin, leader of Russia since 1999. Almost 20 years later, Putin is dealing with a souring economy, a skittish foreign investment base, and other obstacles.
We uncover the four main issues facing Russia, the Ruble, and its notorious leader.