FXBestPractices

Long-term FX risk management Is there a "best practice" for long-tem FX risk management? Or, is long-term FX risk management a case-by-case topic?
How worried should one be about China unpegging? What if anything should one do to address that inevitable occurrence? Very worried! I equate this to: How worried should the airlines have been about the likelihood of increase fuel prices. One airline did what I would have expected all airlines to do, to ensure that the cost of delivering the product is as fixed as possible - Business 101. So the majority of airlines...
What is best practices for addressing transaction, translation or economic exposures? Transaction risk – while still significant inefficiencies exist for almost all international corporations, best practices is to protect the transactional exposure, if for nothing else but not to be surprised for missing earnings. Best practices today show that over 90% protect their transaction...
Is it really as a black and white as to hedge or not to hedge? Is that the right way to look at managing currency exposures? Not any more. To hedge or not to hedge is no longer the question. The question to hedge or not to hedge has evolved into asking to purchase or not to purchase a derivative. The question should revert back to its origin. Should one protect a risk to a corporation and if so what alternatives should one...
The real risk of zero-cost collars is certainly hidden in the name. When are they a good tool to use for corporations? Zero cost collars at the surface are sold as collars that due to selling an option with the received premium and with that premium purchasing an option have no cost. That obviously is incorrect as they do not have any upfront costs but certainly have a cost inside the collar. They certainly can limit...

What type of currency exposure are you most concerned about?

If you have to pick just one type of currency exposure that you are most concerned about and focused on managing, what would it be?

Balance Sheet - Transaction (42.9%)
Short term forecast, inside the current quarter (14.3%)
Long term forecast a la FAS 133 (42.9%)
Other (0%)

You voted for 'Long term forecast a la FAS 133'.

Total Votes: 7
Voting Ends: 8/16/2010

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When the Dollar Rises, Who Will Become the Enron of Foreign Exchange?

The Decline of the Dollar-Then and Now When it comes to foreign exchange, the more things change, the more they remain the same. Today, the dollar is weakening dramatically. Volatility is high. European and Asian companies are struggling to manage the...
The Real Issue with FAS 133

The real issue with FAS 133 is not documenting the hedge! When FAS 133 arose, everyone was scrambling to figure out how to show effectiveness and document it properly. Tools arose to support the process and the documentation as well as provide tools for...
Currency volatility is on the rise and here to stay!

Yesterday's interest rate hike by the Bank of Japan shows a cyclical trend to less collaborative efforts by the G10s to stabilize currencies resulting in continuous and increasing currency volatility. This volatility will continue to highlight inefficiencies...

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