The Case for NOT Hedging Currency Exposures
There are several compelling arguments for not undertaking currency hedging, depending on your specific circumstances and goals. Currency hedging involves using financial instruments to mitigate the risks associated with fluctuations in exchange rates. However, there are situations where choosing not to hedge currency exposure can be a strategic decision. Here are some reasons to consider: […]
Currency Risk and the Butterfly Effect
Embracing the Butterfly Effect in Business In the dynamic and interconnected landscape of international business, the concept of the “Butterfly Effect” holds true with remarkable significance. Just as the flutter of a butterfly’s wings can trigger a chain of events leading to a storm on the other side of the world, the smallest shifts in […]
How Important is Collaboration with Your Financial Advisor?
Much has been written about the role of a Financial Advisor. ASIC have suggested that: Consumers who seek financial advice expect their advisor will act in their best interests and that the advice provided will leave them in a better position. (RG 175.244) When assessing whether an advice provider has complied with the best interest […]
Measuring Your Currency Risk Management Portfolio
When you commence a risk management portfolio, it’s important to remember that you are making decisions for both the short and medium term. In most instances, the objective is to attain certainty regarding your currency requirements as well as the attainment of a particular exchange rate level on an annual basis. Primarily, the review process […]
Currency Risk Management for Competitive Advantage
There are many ways to manage currency exposures. Some give you long term fixed rate outcomes so that your business has complete certainty as to the exchange rate. Other approaches simply take the prevailing rate of the day with the hope that if the market moves adversely, this can be either absorbed into profit margins […]
Currency Risk Management and Diversification
Every business owner is exposed to some type of risk in their everyday life – whether it’s from driving, walking down the street, selecting stock lines or something else. A business owner’s personality, lifestyle, age and business experience are among the key factors to consider for individual risk purposes. Consequently, each business owner has a […]
Currency Risk Management: an alternative income stream for business?
Currency Risk Management, real Currency Risk Management, has the reputation of being a complex part of any business. Like most business challenges significant opportunities exist from complexity. In this instance it is the ability to generate an additional income stream. The Currency Risk Management market is opaque and is maintained that way with hidden margins; […]
How to Build an Effective FX Risk Management Programme
Who is this guide for? Business owners who source their product from offshore markets Business owners who sell into international markets Entrepreneurs who are looking to expand into international markets CFOs working in businesses that deal in international markets Accountants looking to assist their business clients The most successful businesses are those that operate as […]
How to Avoid the Most Common Pitfalls when Managing Currency Risk
Who is this guide for? Business owners considering expanding into offshore markets Business owners who already buy or sell in international markets and have lost money Business owners / CFOs who lie awake at night worrying about currency movements and their profit impact International markets can provide exponential growth for businesses by way of broadening […]
10 Key Questions Entrepreneurs ask about managing FX Risk
Q1. I have a natural hedge, should I only hedge the residual? The answer to this depends on the size of your natural hedge: if you have a large export / import exposure and a relatively small offsetting exposure, then there should be no real risk in managing the residual position If you have relatively […]
