The fact that FX volatility has largely remained subdued despite plenty of geopolitical turmoil has implications regarding how firms think about currency hedging, said speakers at Profit & Loss Forex Network Chicago. For example, Peter Azzinaro, managing director, global macro, portfolio management at Manulife Investment Management, explained that his firm foresaw at the end of […]
Siemens Gamesa Renewable Energy (SGRE) says that it has arranged ”sustainable” FX hedging contracts, totalling €174 million, with BNP Paribas. These are the first FX hedging deals to be arranged under BNP Paribas’s new sustainable derivatives platform, which is linked to the United Nation’s (UN) Sustainable Development Goals (SDG). In a release announcing this news, SGRE […]
A fair bit has been made of the latest FX committee turnover surveys showing an increase in activity during a month in which people broadly experienced the opposite. Looking at the FX platform data and April was the worse month of the year thus far for everyone save 360T and Refinitiv non-spot products – and […]
Internal and technological challenges were cited as one of the main barriers to corporate treasurers adopting cash flow at risk (CFaR) hedging policies, according to a new survey from Bloomberg. More than 100 corporate treasurers, financial analysts and risk managers responded to the poll, which Bloomberg says found that CFaR and earnings at risk (EaR) […]
Despite the geopolitical situation worldwide becoming more volatile, FX markets have stayed relatively idle, leaving speakers at the Profit & Loss Forex Network London event to wonder what has caused this disparity. In recent months, news of geopolitical volatility – from Brexit woes to an intensifying trade war between China and the United States – […]
There have been numerous attempts in the past to create buy side to buy side matching pools for FX, with very limited success. FX HedgePool is the latest venture seeking to do this and, as the company edges towards launch, Galen Stops takes a look at what it is doing differently. In April, Profit & […]
Jay Moore has officially announced his plans to launch a new buy side-to-buy side matching platform for passive FX hedging programs. The new platform, where Moore will serve as CEO, is called FX HedgePool and is designed to allow institutional investors to trade directly with one another. “For 20 years I’ve been developing products built […]
After a good January, March is shaping up to be, much like February, a pretty ropey month for many in the foreign exchange industry, and this is manifesting itself in the form an increasingly louder debate about the lack of volatility. I saw this week one publication suggesting that FX markets need “a proper crisis” to get things moving, but I am not even convinced that will do it. The sad reality for those seeking livelier markets is that this is probably your new ‘normal’.
For many corporate treasurers, deciding what products to use in order to hedge their FX exposures is the easy part of the job. The hard part is working out exactly what their FX exposures are. Galen Stops reports.
When it comes to effectively hedging FX exposures, it seems that the biggest challenge facing corporate treasurers is simply getting an accurate view of what these exposures are.
“Getting a centralised view of our FX exposures is very difficult. It’s always an issue, it’s something that we work on constantly and we’ll probably never get to the point where we have a perfect view on this,” says a source at one European corporate with revenues over $22 billion.
Much has been made of the struggles of speculators to make money in FX in recent years. Colin Lambert takes a look at data that suggests speculators are on the decline, and hedgers on the rise – and he sees some good news for the banks in this, if they can stay one particular course.
Spot FX is “over-broked” to use the market vernacular – there are so many market makers, many of whom are recycling liquidity, that differentiating oneself in this market is extremely difficult unless you are either at the very quick end of the spectrum or are handling plenty of large tickets that require care around the execution.