Currency hedging strategies

Currency hedging strategies

Identify and mitigate the risk your business faces with a currency hedging solution

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What is currency hedging?

Currency hedging is the practice of securing a financial contract that protects you from unwanted exchange rate movements. There are a variety of different contracts, with different goals, which can help limit your exposure to the volatility of the currency market and provide a more stable footing when trading.

With currency hedging solutions in place, you can manage the risk involved with trading currency and essentially protect your funds against any exchange rate movements. 

 

How can my business benefit from a currency hedging strategy?

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, currency transfer requirements increase your exposure to ever-fluctuating exchange rates.

While the price of imports, exports, services and wages may be relatively stable in many lines of business, the value of each transaction when made via an international payment can fluctuate greatly over the course of the year. As a result, it can be harder to estimate your income and outgoings, which of course can directly affect your profits and bottom line. It is crucial for businesses to understand their foreign exchange risk.

Hedging allows you to protect yourself from any negative foreign exchange movements by potentially locking in a more favourable rate for your currency via one or several hedging options. This allows you to conduct business with confidence by safeguarding at least a portion of your funds in accordance with your financial timeline.

 

Which currency hedging strategies are there?

There are a wide range of options that allow you to hedge your currency risk, all of which have their own unique benefits and requirements. It is so important to get the right guidance needed for your business, especially with unpredictable markets. Our Business Resource Hub is a good starting point with helpful articles to assist you and keep you informed of the latest currency movements.

Zero cost options exist to provide a contract that naturally require no up-front payment, while premium options command a fee, however aim to provide a better exchange rate. Alternatively, out-performance options offer a specialist means of hedging for businesses. All of our currency hedging solutions can be discussed with your account manager who will direct you to the accredited dealer.

Discuss our selection of currency options with one of our key account managers for more information on how we can assist with hedging currency risk. 

Assessing currency risk

Assessing currency risk

To find out more about how your business can protect itself from exposure to fluctuating currency values, you can view our brochure. 

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Foreign Exchange Solutions

Foreign Exchange Solutions

Our team will identify your individual requirements to be able to suggest foreign exchange solutions including Spot Contracts, Market Orders and Forward Contracts. 

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Payment Solutions

Payment Solutions

We provide payment solutions for businesses with local or international requirements, who are looking to simplify the process and cut on-going costs. 

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