Focusing on the commercials
Since the early 1970s exchange rate volatility has increased. This is a major concern not only for government policy makers but also corporations engaged in international activities. Despite their best efforts, the profitability of UK businesses of all sizes can be sharply altered by unanticipated exchange rate movements. This has posed a perplexing challenge to researchers, finance teams and foreign exchange vendors alike. Often hedging too much can be as damaging as not hedging at all.
Over the past decade considerable progress has been made in our ability to not only understand the causes of exchange rate fluctuations but also the impact of macro economic changes and the tools used to identify specific business risk and remedies.
Even today, problems can arise from a lack of transparency and the pressure selling of unnecessarily large and long “hedging contracts”.
Our business is built upon a collection of ideas inspired from academic experts in the fields of economics, finance, accountancy and treasury risk management. If we can’t find a costly inefficiency in the way that you manage foreign exchange risk, then we recommend that you keep your current provider.