Category

FX

FXRisk Management
May 13, 2021

A Fresh Look: Refining Financial Risk Management Programs

Streamlining a hedging portfolio can seem daunting, but there are advantages for corporates that take the plunge.There’s a growing trend among corporates to take a new look at existing financial risk management programs. Some of the triggers for review are explicit events, such as financial reporting results or restatements, or changes in key personnel. But many companies are finding that longstanding hedging programs may just no longer meet the original program objectives, or may have grown in silos and created…
Justin Jones
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Cash & Working CapitalFX
April 22, 2021

Improvements in Forecasting Open Doors for Hedge Changes

A move from a current-year to a rolling forecast allows one risk manager to fine-tune the cash flow hedging program.A new CFO can mean a little change—or a lot. In the case of one NeuGroup member who manages FX risk, the new CFO drove an initiative to ensure budget forecasts would have a longer horizon and be available earlier. Over the course of two years, this has enabled an evolution from a program that only hedged a year out from…
Justin Jones
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ComplianceFXNeugroupRisk Management
April 15, 2021

Adding Complexity to Hedging: An Adventure in Entity Restructuring

An FX risk manager faces hedging and forecasting challenges amid changes made in response to BEPS regulations. It’s no surprise that the 15-point action plan announced by the OECD in 2015 to address base erosion and profit shifting (BEPS) would create various headaches for finance teams at multinational corporations. But a member presentation at a recent meeting of NeuGroup FX risk managers provided a fuller picture of some specific challenges facing companies as they comply with the new regulations.At issue for…
Justin Jones
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FXRisk Management
April 1, 2021

Cut the Static: An FX Risk Manager Transitions to Dynamic Hedging

Standard Chartered guides a client to hedging that requires more analytics but aligns more with risk management goals.The increased frequency of so-called black swan (or gray rhino) events roiling currency markets recently has more corporates establishing or revamping FX hedging programs designed to minimize earnings volatility. They face a host of decisions involving which exposures to hedge, timing, instruments and overall approach—static, dynamic or somewhere in the middle. At a recent meeting of FX risk managers, sponsor Standard Chartered, along…
Justin Jones
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BankingFXRisk Management
March 23, 2021

A Risk Manager Leveraging Flexibility to Benefit from Volatility

FX meeting sponsor Standard Chartered: Hedge policy flexibility may decide if volatility is treasury’s friend or foe.Volatility in foreign exchange, commodity and other markets sparked by the pandemic presented risk managers with challenges to their hedging programs. And while some corporates ended up with financial pain, others turned the volatility to their advantage. At a recent meeting of NeuGroup for Foreign Exchange sponsored by Standard Chartered, a representative of the bank used the positive experience of one member to underscore…
Justin Jones
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FXRisk ManagementTechnology
March 18, 2021

Racing to Change Horses: A Risk Manager’s Quick Switch to AtlasFX

An FX risk manager changed exposure ID systems and implemented the new solution in just three months.Changing horses in midstream is never easy, but sometimes it’s the right move. One FX risk manager who did it explained to members of NeuGroup for Foreign Exchange the benefits of jumping off his existing exposure identification system and hopping onto AtlasFX—in an extremely compressed timeline of three months.   The time and effort spent making the switch under pressure paid off big-time. “We…
Justin Jones
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FXRisk ManagementTechnology
March 4, 2021

AtlasFX and FiREapps: How Two FX Risk Management Systems Stack Up

NeuGroup members share what they need from FX risk management solutions, what they get and what could be better.A need for automation, a user-friendly interface and consistent accuracy were among the highest priorities in selecting an FX risk management platform for members at a recent NeuGroup meeting that zeroed in on FiREapps and AtlasFX.AtlasFX ‘dream state.’ One member who recently worked with AtlasFX to adopt the platform lauded the firm’s flexibility and willingness to meet his company’s requests. “We came…
Justin Jones
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BankingFXRegional
February 4, 2021

Cash Pools in Asia for Corporates Trying to Access Funds in China

NeuGroup members describe cash pools designed to overcome obstacles and minimize taxes.Several members of NeuGroup’s Life Sciences Treasury Peer Group have set up cash pools in China relatively recently, a topic they discussed at their fall meeting in 2020 and in follow-up email exchanges with NeuGroup Insights. The pools are generally a means to an end: getting access to the funds in a country where that can be difficult and expensive. Two-way sweep. One member is using what she described…
Justin Jones
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BankingFXRisk Management
February 2, 2021

Under the Hood: How Banks Price FX Swaps With Corporates

Wells Fargo explains credit and capital charges for corporate counterparties on derivative transactions.Corporates that are using or considering using long-dated hedges such as five-year FX forwards or swaps can benefit from understanding the way banks price derivatives using a combination of credit and capital charges. That idea surfaced during a recent meeting sponsored by Wells Fargo for NeuGroup members who manage foreign exchange risk. Credit and capital costs can impact unwinds and restructurings as well as new transactions, Wells Fargo…
Justin Jones
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FXTalking Shop
January 21, 2021

Talking Shop: Net Investment Hedging Programs

Member question: “Anyone have a net investment hedging program? If so, how often are you rolling hedges? “What is your typical tenor? Are you hedging 100% or something less?” Peer answer: “We have done some opportunistic NIH hedging in JPY with FX forwards. We generally use our EUR capacity for debt issuances as well. Hedges have been in the two- to three-year range. “We will go up to 100% of capacity (we do not seek to push to the 125%…
Justin Jones
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