Foreign exchange risk management
Protect your profits and limit your currency exposure with our range of FX hedging tools and options
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Protect your company and preserve profits with a currency risk management strategy
We are here to help businesses keep an eye on risks and spot opportunities associated with the financial markets and help them plan ahead as the world eases out of Covid-19 restrictions, as well as find their feet in a post-Brexit landscape.
Moneycorp offers a wide range of currency hedging solutions to help protect your business from unwanted exchange rate movements, from the most basic, low-risk strategies to more complex approaches that may give you the opportunity to out-perform current market rates.
Limit your FX exposure with our range of tools and options
Forward Contract
A forward contract allows you to buy currency on an agreed future date at a pre-fixed rate. This may require a deposit and allows you to lock in a rate for up to two years.
FX Orders
If you need a particular exchange rate but have no urgency to purchase straight away, an FX order could help you secure a better deal.
Vanilla Options
The most basic option that gives you the right, but not the obligation, to exchange currency at a specified rate at a known date in the future.1
Zero-Cost Options
A variety of options that can offer protection, like vanilla options, but sacrifice some of the benefits in exchange for no up-front premium.1
Ian Holdcroft, Co-founder, Shackleton
"Over the last year, uncertainty has added extra stress around planning as no one really knew what would happen with duties and VAT etc. Using somebody like Moneycorp, you can hedge some of that risk, and you have access to an internal team of analysts who are closer to the action in terms of understanding the likelihood of sterling weakening or strengthening versus the dollar or euro, which is really helpful. It’s a heck of a lot better than the service you get from a high-street bank, for instance."
Key Questions
What is FX/currency hedging?
Currency hedging is the practice of protecting your business from unwanted exchange rate movements. This can be done via currency contracts or options, all of which have different functions and goals and play an important part in a risk management strategy.
Why might my business need an FX risk management strategy?
A risk management strategy could help you limit your currency exposure and protect your profits.
All major currencies—whether due to politics, economics or other external factors—will fluctuate against each other. Whether your organisation is an importer of goods from abroad, regularly receives payment in foreign currencies or relies on paying international staff in local currency, international payments increase your exposure to ever-fluctuating exchange rates.
These sudden exchange rate shifts can affect the value you receive when exchanging currency creating financial risk and making it difficult to forecast costs and income.
What are the steps to building an FX risk management strategy?
Firstly, your qualified Relationship Manager will get to know your business and the role foreign exchange plays in it. You will then specify your goals and agree on budgets so that a unique FX risk management strategy can be developed to suit your needs. Along the way, your Relationship Manager will provide guidance and work with you to select appropriate hedging solutions. Finally, your Relationship Manager will then begin executing the agreed FX risk management strategy, providing updates and making adjustments in line with market changes.
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1 Our team of experienced currency risk management specialists are approved by the FCA for investment business. Following an initial assessment of your risk-appetite and investment objectives they can formulate and illustrate a bespoke solution for you to consider. Please note that Option related products are regulated investment products which can carry a higher level of risk than Forward Contracts.
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None of the information contained in this website constitutes, nor should be construed as financial advice.
Indicative rates are displayed on our website. We use interbank rates as a reference, and these rates should only be used as a guide.
Moneycorp is a trading name of TTT Moneycorp Limited, a company registered in England under registration number 738837. Its registered office address is at Floor 5, Zig Zag Building, 70 Victoria Street, London SW1E 6SQ and it is VAT registration number is 897 3934 54. TTT Moneycorp Limited is authorised by the Financial Conduct Authority under the Payment Service Regulation 2017 (firm reference number 308919) for the provision of payment services.
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