Limited-loss hedges help US firms dodge costly FX moves
Structurers say US corporates’ use of options-based net investment hedging helped soften impact of USD selloff
Foreign exchange structurers are seeing increased demand from US corporates for options-based hedges that can limit losses on their net investment hedges caused by the US dollar’s selloff.
While the economic value of derivatives hedges offsets changes in foreign assets, when those positions hit maturity companies can face hefty mark-to-market payments.
Bank structurers, though, say companies with foreign assets and subsidiaries in places like Europe, where the euro has strengthened significantly
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact customer services - www.fx-markets.com/static/contact-us, or view our subscription options here: https://subscriptions.fx-markets.com/subscribe
You are currently unable to print this content. Please contact customer services - www.fx-markets.com/static/contact-us to find out more.
You are currently unable to copy this content. Please contact info@fx-markets.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@fx-markets.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@fx-markets.com
More on Trading
Deutsche Bank takes AutobahnFX on the open road
Proprietary trading platform sets out new workflow-based approach to collaborating with venues
DC hedges return amid tariff pause
Following a sharp drop in public deal flow in April, dealers say interest has come roaring back
Disclosed trading an oasis in the FX liquidity ‘mirage’
LPs say growth of relationship-based trading bolstered market during April volatility
Standard Chartered taps Newman to head rates and FX trading
UBS veteran becomes latest fixed income trading exec to leave Swiss bank
Banks seek to advance predictive pricing models
AI and machine learning-based tools could give FX desks the power to forecast currency movements
Hedge funds burned as Hong Kong dollar bets implode
Carry trades and call spreads unwound after Trump tariffs pushed spot to edge of currency peg
What drove the Taiwan dollar surge?
Foreign speculators, carry unwinds and central bank inaction fuelled the 10% move, not just life insurers, say traders
European investors ramp up FX hedging as ‘dollar smile’ fades
Analysts at one bank expect average hedge ratios to jump from 39% to 70% within six months
