major currencies can fluctuate between 5% to 15% annually, with some experiencing even higher volatility during periods of economic instability. This presents risk to businesses.
Transaction Risk: Changes in exchange rate between the time a transaction is initiated and settled impacts the value of cash flows associated with that transaction wether it is sales, purchases, or investment.
Transalation risk: This occurs when a firm's equities, assets, liabilities, or income are denominated in a foreign currency and any fluctuation in the exchange rate will cause a change in the value of the assets, liabilities, or income, when translated into the reporting currency of the company.
Currency movements can have a devastating impact on a business. Managing currency risk can be key to a business surviving and thriving.
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A currency forward is a binding contract in the foreign exchange (FX) market that locks in the exchange rate for the purchase or sale of a currency on a future date.
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Micro-hedging is a currency risk management strategy using automation that consists of hedging each transaction as it occurs.
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We offer a solution that utilises sophisticated analytics to identify Value at Risk for a range of time periods and confidence intervals, aiding you in managing FX volatility on your balance sheet.