Hedge Trackers Comments on Treasury & Risk Article Regarding 2019 Currencies
Treasury & Risk
“Currencies in 2019: Expect the Unexpected”
“In order to be strategic, corporate treasury teams need to understand not only how currencies are impacting their financial statements, but also how they can offset exposures and mitigate potential impacts. Technology tools that include business intelligence, AI and interactive reporting can deliver insights on both counts. Businesses that adopt such ‘intelligent’ technologies are better equipped to develop more sophisticated currency-management processes.”
Hedge Trackers CEO, Helen Kane, commentary:
In order to be strategic, as a corporate treasurer, you must understand not only how currencies are impacting your financial statements, but what your expectations are from your hedge program. If you are disconnected from both your hedge program and the treasury people in your organization, then a hedge strategy that was implemented 20 years ago …..
Also, something to keep in mind is that AI isn’t going to help you with the heart of your program. For people who don’t hedge all of their risk on their balance sheets, they will believe portfolio theory can get rid of x% of their risk, and hedge currency earn forward points and pay away fewer points. When doing efficient front tier, the expense of currencies to hedge are exactly the countries and currencies that are most likely to blow up on you.
Get an overview on how to maintain a balance sheet hedge program here.