Category

FX

BankingFXTalking Shop
September 24, 2020

Talking Shop: Methods for Pulling Cross Rates From Central Bank Published Rates

Question: How does your company pull cross rates that are required to be pulled from central banks’ published rates?  “Looking for some teams to benchmark on how you all pull the cross rates that are legally required to be pulled from central bank published rates. Pulling these rates from central banks’ websites is inefficient and we wanted to know how others are doing this.”  Peer Answer 1: “We use Bloomberg’s data license program to get the rates via a file and upload them automatically to our enterprise…
Justin Jones
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FXTechnology
September 21, 2020

Risk Managers Face an Inflection Point Without a Clear Direction

Key takeaways from the FX Managers’ Peer Group 2 2020 H2 Meeting, sponsored by Societe Generale.   By Joseph Neu  NeuGroup’s second-half meeting season got off to a great start with the FX Managers’ Peer Group 2 last week. Here are some key takeaways:We are at an inflection point, but to what? It feels like we are at an inflection point that requires MNCs to adjust their FX hedging. The reasons include the economic impact of Covid-19 on business, early crisis concerns about liquidity pushing out liabilities, unprecedented monetary intervention…
Joseph Neu
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Accounting & DisclosureFX
September 15, 2020

Talking Shop: Disclosing Option Premium Expenses in Revenues

Context: In 2017, the FASB issued ASU 2017-12, which simplified and expanded the eligible hedging strategies for financial and nonfinancial risks. The update goes into effect for all corporates this year, and some NeuGroup Members recently collaborated to share their approach to updated guidance on disclosing option premium expenses in their revenues. Question: “Does anyone disclose option premium expense in their revenues due to ASU 2017-12?” “As a consequence of the revised accounting for hedge costs under ASU 2017-12, our company is reviewing our typical…
Justin Jones
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FXTechnology
August 13, 2020

Automating FX Trades: How Heavy a Lift?

Key takeaways from 360T from a NeuGroup Virtual Interactive Session Earlier this summer, technology provider 360T discussed some of the benefits of automating FX trades at a Virtual Interactive Session for NeuGroup members called “Demystifying Automated Trading Across the Trade Lifecycle.” Following are some takeaways as distilled by 360T about the technology lift involved in automating workflows and trade execution. Although some of the treasurers expressed optimism that automated trading solutions could help improve their FX workflow and execution, there was…
Antony Michels
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COVID-19FXRisk Management
July 28, 2020

What Dollar Weakness and ‘Japanification’ Mean for FX Hedging Strategies

Corporate financial risk managers should be reassessing long-held assumptions as they look to redo their hedging.Add a weakening US dollar to the growing list of reasons risk managers at multinational corporations need to take a long, hard look at their hedging programs and strategies. That takeaway emerged at a NeuGroup Virtual Interactive Session last week featuring Societe Generale global strategist Albert Edwards, known for his provocative mid-1990s “Ice Age” thesis of bonds outperforming stocks.Christophe Downey, a director in the bank’s…
Antony Michels
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FXTechnology
June 23, 2020

Can You Save A Month a Year Automating FX Trades?

360T says corporates can use the roughly four weeks saved by automating FX “nuisance trades” to spend time on more valuable analytical work.  The graphic above demonstrates some of the benefits of automating FX trades described by technology provider 360T at a recent interactive session for NeuGroup members called “Demystifying Automated Trading Across the Trade Lifecycle.” The time savings accrue by eliminating the need to manually enter orders onto trading platforms, examine the pricing offered, choose among competing banks (and sometimes talking…
Antony Michels
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FXRegional
June 18, 2020

Pandemic Hits Argentina Hard – With Tighter FX Controls in Its Wake

The pandemic has inflicted serious pain on world economies and it could be extra painful for Argentina.   Argentina has faced recurring fiscal crises, and now the global pandemic-induced economic recession has once again pushed the country to the brink of defaulting on its dollar-denominated sovereign debt. For corporates doing business there, including members of NeuGroup’s Latin America Treasury Peer Group (LatAmTPG), the most visible manifestation of the crisis is in the defensive measures the government is taking to preserve FX reserves, i.e.,…
Ted Howard
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Accounting & DisclosureCapital MarketsFXRisk Management
May 7, 2020

Crisis Forces Consideration of Unwinding Cash-Flow Hedges

The COVID-19 crisis has reduced exposures to a point where for many companies those hedges may not be needed anymore. Time to unwind? If you’re planning on unwinding a cash-flow hedge, there are many things to think about before you do. Determining when and why to unwind, as well as how to view the transaction’s cost benefits, and what counterparty to use, are just a few of the factors to consider. This was the topic of discussion among NeuGroup FX Managers’…
Ted Howard
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FXRisk Management
April 14, 2020

As Day Follows Night: China Exposures Grow and So Do the Hedges Against Them

Members whose companies have material exposure to the Chinese market exchange experiences with how to manage the currency risk. What’s the best course of action when corporates need to blunt their growing cash-flow exposures in China? The answer, hedge. But what’s the best approach? Depends on the company of course. At a recent FX summit of NeuGroup’s two FX Managers’ Peer Groups – which due to COVID-19 was NeuGroup’s first-ever virtual peer group meeting – one session dealt with managing…
Ted Howard
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FXTreasury Management
April 9, 2020

How to Protect FX From Newbies on Rotation

A NeuGroup member asks peers how to train people passing through the FX function without raising the risk of costly mistakes. More often than not, specific corporate functions love a rotation plan where people from other areas come through to learn how the work in that function gets done, usually as part of a training and development program for high-potential talent. But for FX, more specifically trading, this can sometimes be a little tricky. For instance, how, asked one FX manager…
Antony Michels
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