Liability Management
INR – everything is relative
The INR’s over-extended valuation against the Reserve Bank of India’s REER implicit policy anchor continues. This over-extension is looking anomalous against the continued backdrop of Asian FX selling. Claudio Piron, Asian FX strategist at JP Morgan in…
A broader view than the yuan
While much attention is focused on a likely shift in the value of China’s currency, Ashish Advani (right), director of risk solutions at Travelex in Toronto, points to a way of hedging against the more imminent risk of free-floating Asian currency…
Kissing with confidence is key to FX
Keep it structurally simple (Kiss), says Evan Steed, director FX options trading and sales TD Bank Financial Group. This truism is especially appropriate as the greenback faces an uncertain future and regulatory change comes to Canada
Banks review yuan reval forecasts
BEIJING – Some bank analysts have brought forward their expectations of regime change in the Chinese yuan, following the rate hike by the People's Bank of China late last month.
The American-style participating forward
Clients wishing to trade at a pre-specified strike rate during a certain window period, should consider the American-style participating forward, say Bank of America options specialists Jim Kamphoefner in San Francisco and Ravi Chopra in Singapore
Funds repatriation bill set to pass
NEW YORK – A bill offering US companies the chance to repatriate overseas earnings at a hugely discounted tax rate is set to be signed into law in the next week – much sooner than previous estimates, said analysts.
Hedging when the market moves against you
A nine month sliding forward structure can help your company achieve attractive FX hedging rates when the market has moved substantially beyond your budget rates, says Adam Gilmour, head of FX options sales in Citigroup's emerging markets sales and…
FXC issues broker points rules
NEW YORK – The Foreign Exchange Committee, a US industry association affiliated to the Federal Reserve, last week issued new guidelines on broker ‘points’ – the issue at the heart of last year’s massive Wall Street forex fraud.
Euro doubts remain despite EC growth forecasts
LONDON – Economic growth in the eurozone is set to exceed the European Commission’s forecast of 1.7% in 2004, it said in its quarterly report last week – but analysts remain sceptical that this will be enough to sustain the euro’s current rally.
An average rate option to protect the budget
As euro/dollar continues its descent, Rabobank’s corporate sales desk in Utrecht suggests one way for European corporates to profit from the move
Time is right for early barrier forwards
The high level of volatility in the market makes this an opportune time for corporates to use early barrier forwards to hedge cable risk, says Barclays Capital’s senior FX structurer in London, James Edwards
IAS39 amended for macro hedging
LONDON -- The International Accounting Standards Board (IASB) last week announced an amendment to IAS39 to aid the use of macro hedging.
NAB report: managers axed
FX head and three executives leave NAB in wake of report on forex losses MELBOURNE -- National Australia Bank (NAB) sacked head of FX Gary Dillon on Friday (March 12) after he was criticised by PricewaterhouseCoopers’ independent report into the bank’s A…
Correlation for hedging and speculation
One of the most surprising FX developments in the past year has been the re-emergence of the use of correlation products. Ade Odunsi, a director in Merrill Lynch’s FX risk advisory group in New York, suggests two such solutions for a hedging and a…
How to ride out the rising Aussie
The stellar rise of the Aussie doesn’t have to be bad news for Australian exporters. Wes Price, of ANZ Bank’s consultative risk management group in Melbourne, explains why
May - Banks’ operational risk lapse exposed
A special investigation by FX Week in May revealed a lapse in operational risk management at banks that do not separate risk management budgets from business lines.
Hedging Taiwan dollar risk
Exporters exposed to movements in the Taiwan dollar must hedge by using the non-deliverable forwards market. Michael Image, FX options structurer for northeast Asia at Standard Chartered Bank in Hong Kong, suggests a zero upfront premium solution, which…
Central Europe sees shift in fortunes
BUDAPEST -- Economic fortunes have been changing in central Europe, possibly more so than markets have recognised, said FX strategists at Merrill Lynch.
Won worries for Korea
SEOUL -- The Korean won could be weakened in the medium term by the slowing of South Korea’s economy and government policy failing to tackle a slump in consumer spending, says a recent report by Barclays Capital.
Multi-choice options for eurozone exporters
The multi-choice strategy forward option can offer flexibility to a euro-denominated exporting company looking to hedge its long-term dollar exposures, says Roman Stauss, head of FX product development at Commerzbank Securities in London
Banks counter IAS39 threat
LONDON -- Banks are developing new structuring models for corporate clients to ensure the IAS39 accounting standards do not result in a reduction of complex FX hedging activity.
Cashflow control for pension portfolio hedges
Neil Record, chairman and chief executive officer of Windsor-based currency overlay manager Record Currency Management, offers a solution to an FX-related problem facing a UK pension fund
Hedge optimisation under IAS39
All European Union listed companies must implement IAS 39 by the end of this year. Raymond Franzi, head of structuring, and Emmanuel Burot, head of structuring and accounting at Dresdner Kleinwort Wasserstein in London, outline how a European firm should…
Crackdown on risk budgets
Trader sign-off on revaluing data must end, says industry body NEW YORK -- The Professional Risk Managers’ International Association (Prmia) is considering issuing guidelines recommending banks separate their risk management budgets from FX and other…