Identifying FX Exposures: A Critical Step in Developing an FX Risk Strategy

Identifying FX Exposures: A Critical Step in Developing an FX Risk Strategy

In an earlier article, we helped you build a foundation for your FX risk management strategy with a “brick and mortar” analogy… the process of collecting exposure data and executing hedges we described as “bricks,” and risk measurement and analysis using VAR and confidence intervals were described as “mortar.” This article will discuss a crucial step in your foundation-building process: gathering accurateFX exposure data.

How to Convince your CXO to Hedge Forex

How to Convince your CXO to Hedge Forex

Sir Arthur Conan Doyle said (via Sherlock Holmes), “When you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.” An unexplained, or otherwise anticipated “no” to the question of hedging FX is like a mystery. The way to decipher why executives won’t hedge, and convince them to act, is to remove the possible arguments against hedging, one by one.

Why Not to Not Hedge Your FX Risk

Why Not to Not Hedge Your FX Risk

If only executives spoke as parents do to their children: Mom, can I…? No. Why not? Because you did not eat your vegetables. Or, the infamous, because I said no. At least you’d know there is or isn’t a chance to change their view and what action is required…

FX Budget Rates: Confident Becomes You

FX Budget Rates: Confident Becomes You

Treasurers and risk managers who’ve been around the block recognize that fluctuating market rates rapidly affect their ability to capture that rate.

This article focuses on how you can set budget rates and align your FX strategy to increase confidence that your company will convert its forecast exposures at the budgeted conversion rate.

A Dose of Reality: Rethinking FX Budget Rates

A Dose of Reality: Rethinking FX Budget Rates

We all daydream of winning the Publishers Clearing House Sweepstakes. A cushion of $25,000 per month would go a long way to pay bills, save money for rainy days, and build a retirement nest egg. Alas, the probability of such a stroke of luck is miniscule. 

Put Confidence in Your FX Strategy

Put Confidence in Your FX Strategy

Remember the story of the three little pigs? If you’ve ever leaned against a brick wall, you know the unsung hero of the story was mortar – the cement that connects every brick so the wall stays intact, and serves its purpose.

Our title, Put Confidence in Your FX Strategy, asserts that the way to build a strategy is to include confidence among the materials used, like the mortar in a brick house.

Measuring FX Risk: Crises with Confidence

Measuring FX Risk: Crises with Confidence

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.

How to Use Probability to Manage FX Risk

How to Use Probability to Manage FX 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.

FX Risk Management Objectives

FX Risk Management Objectives

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?”

How Tesla and Other Manufacturers Are Impacted by Currency Risk - and How They Manage It

How Tesla and Other Manufacturers Are Impacted by Currency Risk - and How They Manage It

When supply chains stretch across borders, currency risk becomes a key consideration. Currency risk can be a roller coaster ride for even the largest global manufacturers.

Exhibit "A" could well be Tesla, which has seen its financial fortunes zig and zag due to currency swings in recent years.

The Biggest Currency Risk Management Mistakes Companies Make

The Biggest Currency Risk Management Mistakes Companies Make

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.

How Tech Startups Benefit from Rich FX Data (and why it's dangerous to go without)

How Tech Startups Benefit from Rich FX Data (and why it's dangerous to go without)

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.

With Interest Rates on the Rise, What Is the Impact on Currencies, Taxes and Foreign Investment?

With Interest Rates on the Rise, What Is the Impact on Currencies, Taxes and Foreign Investment?

With renewed talk on continued U.S. interest rate hikes, corporate financial offers need to get a grip on the ensuing impact of higher rates on the economy, currencies, and business investment.

One thing is for sure—the Federal Reserve is pointing directly to higher rates.

Your Brief 3-step Plan: Building an Expert FX Strategy That Truly Offsets Risk

Your Brief 3-step Plan: Building an Expert FX Strategy That Truly Offsets Risk

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.

October Alert: Global Tax Laws Adjusting in North America and the Eurozone

October Alert: Global Tax Laws Adjusting in North America and the Eurozone

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.