Deutsche Bank and Primetals Technologies have reached agreement on what they claim is the world’s first hedging concept that links currency options to sustainability goals. The framework agreement enables Primetals Technologies to hedge its currency risk with FX options with the bank over a period of four years. Should Primetals Technologies fail to meet the […]
Tag: FX hedging
A new study by Lumint Corporation and New Change FX (NCFX) argues asset managers are “turning a blind eye” to FX costs and passing these costs directly on to end investors by means of a lower net asset value. The study finds the average transaction cost of an overlay FX hedge is $267 per million, […]
Cloud-based order and execution management system (OEMS) provider Tora, has announced the release of its new FX auto-hedging function for equity pairs trading. The new solution sits within the firm’s equity pairs trading algo suite and offers automatic hedging for clients’ cross currency equity pairs and equity derivatives trading. It captures all transactional information on […]
A surprisingly small number of the world’s largest companies employ sophisticated techniques designed to assess and manage their foreign exchange risk, according to a survey by Greenwich Associates. Companies use FX markets to hedge currency risks in the course of their businesses, however, Greenwich says, relative to banks and financials, their FX needs and strategies […]
Having dragged Colin Lambert and Galen Stops kicking and screaming off the beach, the podcast is back and they are into the swing of things early, discussing the changing attitudes of fund managers to FX. Looking at this week’s NAB survey of Superannuation Funds FX attitudes, Lambert highlights the paradox of funds investing more in […]
NAB’s ninth biennial Superannuation FX hedging survey highlights what Ray Attrill, head of FX strategy at the bank, terms “seismic shifts” in how managers of the fourth biggest pension pool in the world, think and handle their currency exposures. “The fact that the majority of managers are now thinking of currency through the same lens […]
National Australia Bank (NAB) has launched its biennial 2019 Superannuation FX hedging survey, the ninth such survey that seeks to provide detailed analysis of how Australian super funds manage their currency exposures. Australia has the fourth biggest superannuation pool in the world, as at December 2018 assets stood at AUD 2.7 trillion, of which around AUD 1.8 trillion is institutional money, with the balance being in private self-managed funds. The bank says this is the only survey of its kind in Australia thanks to the level of detail it goes into around how asset owners are managing their currency risk.
The FX industry is a vibrant, innovative place, but sometimes I think it forgets why it exists. This amnesia means as an industry, FX does not respond sufficiently on those occasions when people with no understanding of the nuances of the business suggest “improvements”.
So many news threads running through the industry at the moment seem to be idealising a totally transparent, all-to-all trading environment. This works in domesticated markets like equities, but it doesn’t work in global, institutional markets like FX – especially when we remember why we are here.
A recent study from Chatham Financial finds that less US corporates are hedging their currency, interest rate and commodity risk exposures than three years ago.
The study, which analyses the 2015 financial risk management practices of more than 1,500 publicly listed corporations in the US, found that the number of overall companies utilising currency and commodity hedges fell three percent from 2012 to 37% last year.
It also found that only 55% of firms with exposure to currency risk actively manage this risk through the use of financial hedges.