European exporters add flexibility to FX hedges
Corporates with USD exposures have been reducing hedging tenors and adding optionality
European corporates have been shortening the tenor of their foreign exchange forwards hedges so they can react more quickly to market conditions should spot and hedging costs improve, according to dealers.
Banks say corporates that typically might have hedged at the five-year tenor are now looking at monthly rolling strategies, for example.
“Our volumes pick up at the end of the month, just because corporate clients usually like to come closer to the end of the month to roll their hedges and put
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