Today, firms managing foreign exchange exposures span an unusually wide range of size, business culture and resource availability.

From the importer who buys a critical component overseas, to the multi-national manufacturer with plants in 50 countries, to the most sophisticated of global port-folio managers… currency management has increasingly become an important component of their business plans.
While these businesses differ in many ways, they all face the identical foreign exchange questions: what exposures to hedge, when to do it, how to do it, and for how long. Most of all, firms need to know the range of expected outcomes.

Managing a company’s foreign exchange exposures is as important a function as cash management or regulatory compliance. There is no single “right” way to manage currencies - but they must be managed.

Many managers are uncomfortable with the intersection of business activity and currency gains; they fear being accused of speculation. Our philosophy, however, is that reaping opportunity gains is as appropriate a goal as preventing catastrophic losses. In a world where a currency can gain 35% in value in eighteen months - and then reverse to lose 35% - every truly international firm needs to address currency risk.

To hedge everything blindly is as sub-optimal as to hedge nothing, if only because neither approach recognizes the cost of uncertainty. Selective hedging may or may not reduce risk itself, but defining the issues correctly up-front allows the decision-maker to make an informed choice.

A disciplined, balanced approach to currency management increases profits and reduces opportunity losses, and thus enhances competitive position.

To achieve the global competitive edge in a world-wide market, effective currency management depends upon excellent information and insightful analysis.