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How to Manage Foreign Exchange Volatility
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• Introduction
• Market Overview
• What Moves the Market?
• Risk Management Solutions
• Effective Tools
• Questions
Agenda
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• Largest freely traded market in the world
• Open 24 hours a day
• $5 trillion daily turnover
• $2 trillion spot transactions
• $3 trillion in forwards, currency swaps, and options
• Approx. 13 times larger than global equity markets
• USD, EUR, JPY, and GBP are the three most trades currencies
Market Overview
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What Moves the Market
• Government and central bank policies
• Political developments/uncertainty
• Inflationary expectations
• Tax laws
• Stock market news
• Employment data
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Risk Management Approach
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Forward Contracts allow you to lock in exchange rates for up to 12 months in the future without having to use all of your cash flow to purchase the currency upfront.
Forward Contracts provide your business with certainty amongst the volatile realms of the foreign currency markets and can be tailored to your requirements throughout the 12 month period.
An initial deposit may be required depending on many factors surrounding the risk of your commercial requirement.
Forward Contracts
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Currency Options Like Forward Contracts, Options allow you to protect your bottom line against fluctuations in the currency market but with Options there’s also potential for you to take advantage if the currency pair moves in your favor.
Pay a premium upfront, and you can fix an exchange rate for a point in the future where you can benefit up to 100% if the rates move in your favor. The higher the premium, the more flexibility and freedom you have.
If paying a premium does not suit your business model, the cost can instead be built into your exchange rate, and you will still be able to benefit 100% if the rate moves into your favour.
We offer a full suite of Options products:
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Rate Orders allow you to manage any currency fluctuations around the clock by allowing you to choose a target buy or sell rate. Our Relationship Managers will guide you on a suitable target rate and notify you once the target rate is reached.
Rate Orders can sit in the market for any length of time but are traditionally limited to 14 days. You can even limit a Rate Order to the length of a couple of hours, which could be crucial within a fast moving market.
Rate Orders
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Currency Focus: EUR/USD
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Currency Focus: GBP/USD
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Currency Focus: USD/JPY
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• Receiving real-time market updates
• Proactively monitoring relevant currency pairs
• Anticipating volatility based on news releases
• Taking advantage of attractive levels
Market Watch
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• Create and execute Spot Transactions and Forward Contracts 24/7
• Plan and manage cash flow with separate totals of currencies purchased and scheduled payments for future release dates.
• Set user-specific permissions and access rights with a multi-tiered approval process.
• Get automatic verification of beneficiary banking details for proper payment format.
• Process multiple payments in one simple step through our integrated file upload
Online Trading Platforms
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Online Trading Platforms
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• Providing USD and foreign currency invoice
• Better penetrate markets resistant to dealing with currency conversion
• Allows organizations to capture additional revenue
• Strengthen foreign partnerships
Dual Invoicing
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Questions
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Contact Information
Frank HallakBusiness Development Executive
