Introduction to currency risk management
Fluctuations in currency prices are one of the sources of risk that may influence the financial results of corporations or individuals having credits/liabilities in foreign currencies. Assuming that the company:
has assets or business operations across national borders;
invests abroad;
has credit or loanes in a foreign currency
It follows that it is exposed to currency risk, as long as the management does not decides to hedge the positions.
Volatile exchange rate fluctuations that occurred during recent years had a significant influence on the financial results of many corporations, often weakening their position among competitors. Moreover, higher volatility of exchange rates may lead to a decrease in incomes for exporters and more expensive goods for importers.
For the reasons described above, an increasing number of corporate clients are investigating the possibilities of currency risk management, looking for optimal solutions.
The derivative instruments offered by X-Trade Brokers enables one to manage the currency risk simply and cheaply. High liquidity, with no hidden costs and easy access 24 hours a day - make CFD and financial options attractive and convenient tools to manage currency risk.
For further information please do not hesitate to contact us. Our Corporate Sales Department can be reached at +48 22 520 22 86/87.
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