How finance leaders can build smarter FX risk strategies

By Graham Sheridan

If you’re a CFO or Finance Director, you already know that foreign exchange risk can quietly chip away at margins, disrupt cash flow, and complicate planning. What’s less often discussed is how to manage that risk in a way that’s structured, strategic, and actually useful to your business.

Too many companies still treat FX as a tactical issue, something to react to when rates move against them. But the truth is, by the time you’re reacting, it’s often too late.

At Moneycorp, we believe in a different approach: one that’s structured, strategic, and built around your business, not the market. Let’s talk about what good FX risk management looks like, and how you can build a strategy that works for your business, not just the market.

 

1. Measure what matters: Building a clear FX risk profile

Before you can manage FX risk, you need to understand it. That starts with identifying where currency exposure lives in your business, whether it’s supplier payments, overseas revenue, intercompany flows, or payroll.

A robust FX audit should include:

• Exposure mapping: What currencies are you exposed to, and at what volumes?
• Sensitivity analysis: How do rate movements affect your margins?
• Cash flow timing: When do exposures crystallise, and how long do they remain open?
• Historical benchmarking: How have past decisions performed against budgeted rates?

This kind of audit doesn’t need to be complicated. But it does need to be done properly. Our FX Health Assessment tool is designed to help finance teams get a clear view of their current position and spot where things might be falling through the cracks.

 

2. Benchmarking FX performance: From gut feel to data-driven decisions

One of the most common mistakes we see is businesses making FX decisions without any way to measure whether they worked. Did you hit your budget rate? How did that impact your margin? Did you manage any unnecessary risk?

We recommend tracking:

• Execution vs. budgeted rates
• Cost of carry and hedging premiums¹
• Impact of timing decisions
• Strategic alignment with business goals

If you’re not benchmarking performance, against budget, against market averages, against your own strategic goals, you’re flying blind.

We help clients build simple, practical benchmarking frameworks that give them clarity. Not just on what happened, but how to use that to inform your decision making.

 

3. Strategy first, product second

Forward contracts², options³, market orders – these are tools. Useful, yes. But only when applied with intent. At Moneycorp, we don’t start with products. We start with your business.

We design FX strategies that reflect how your operation actually runs. That means understanding your cash flow dynamics, your exposure to currency risk, and the planning horizon you're working to. It means asking the right questions: How predictable are your payments? Where are your vulnerabilities? What flexibility do you need to maintain margins without locking yourself in?

For a business with regular supplier payments, a rolling forward strategy might offer the right balance of certainty and simplicity. For a company entering a new market, a tranche-based approach could preserve optionality while managing downside risk. These aren’t off-the-shelf solutions, they’re tailored responses to real commercial scenarios.

We’re not here to sell products. We’re here to help you make better-informed FX decisions. That starts with strategy.

 

4. Market timing: Why chasing rates creates risk

Trying to ‘beat the market’ is one of the most common and potentially costly mistakes in FX management. It introduces emotional decision-making, delays execution, and can leads to buyer’s regret.

Instead, we support:

• Averaging in: Breaking exposure into tranches to smooth volatility
• Pre-agreed budget rates: Anchoring decisions to strategic targets
• Automated execution: Using market orders to remove emotion

The goal isn’t to win against the market, it’s to manage the risk it presents against your business from it.

 

5. Execution with confidence: Technology that enables strategy

Even the best strategy falls short without effective execution. That’s why we built Moneycorp Online (MCOL), a platform designed for finance teams who need control, visibility, and speed.

With MCOL, you get:

• Real-time access to more than 30 currencies
• Secure file uploads for mass payments
• ERP integrations with Xero, NetSuite, QuickBooks
• Custom reporting and audit trails

It’s not just a trading tool; it’s an enablement platform that supports your entire FX lifecycle - with access to dedicated support from experts when you need it.

 

6. Strategy that evolves with you

FX risk isn’t static. It shifts as your business grows, enters new markets, or adjusts its operating model. That’s why your FX strategy can’t be a one-off exercise, it needs to evolve.

At Moneycorp, we build partnerships designed to support that evolution. That means regular strategy reviews, not just to check the box, but to challenge assumptions and adapt to change. It means training your finance team – so they’re equipped to make informed decisions, not just follow instructions. And it means proactive market insights – delivered in plain English, with clear implications for your business.

We’re not here to execute trades in isolation. We’re here to help you build a resilient FX framework, one that supports long-term growth and stands up to real-world complexity.

 

From risk to resilience

FX risk is complex; but it’s manageable. With the right measurement, strategy, and execution, finance leaders can turn volatility into a source of strength.

At Moneycorp, we help CFOs and Finance Directors execute FX strategies that are clear, confident, and commercially aligned. Because in today’s global economy, resilience isn’t built by chasing rates, it’s built by design.

 

 

 

Graham is Head of Sales for Retail, Wholesale, Industrial, and Logistics at Moneycorp. A seasoned FX risk manager, he brings deep expertise gained from working with a diverse range of corporate clients, asset managers, and insurers throughout his career. Graham now leverages this experience to help businesses navigate market volatility with confidence, delivering tailored FX strategies that are both effective and efficient.

 

¹Hedging Solutions may help offset the potential risk of foreign exchange rate fluctuations which could result in losses in upcoming expenses for goods, services, or direct investments via Moneycorp. To hedge your business' balance sheet exposure, additional products and services are provided by our Moneycorp Financial Risk Management Limited business.

²Forward contracts may require a deposit. This product should be used to facilitate payments for goods, services or direct investment. 

³Options products may not be appropriate for all prospective clients.

Views expressed in this commentary are those of the author, and may differ from your appointed Moneycorp representative. This commentary does not constitute financial advice. All rates are sourced from Bloomberg and forecasts are taken from Forex Factory. 

Helping global businesses move forward

At Moneycorp, we've helped clients trade over £79 billion across 130+ currencies, and we currently serve more than 11,000 active clients worldwide. Whether you're entering a new region or scaling your global footprint, we bring the tools, insights, and expertise to help you thrive across borders.