CFOs should consider micro and macro elements when hedging FX

A comprehensive new report by Deutsche Bank on FX hedging helps treasurers and CFOs to decide when and how to hedge their currency exposures.

Volatile foreign exchange FX and currency values twinned with changing regulations have raised the stakes for companies’ FX hedging strategies. But, according to a new report from Deutsche Bank, FX hedging goes far beyond mitigating currency risk a successful FX hedging strategy can and does increase shareholder value, support a firm’s competitive position, and reduce stock price sensitivity to exchange rate movements.

But this means getting it right, and in practice, creating value from FX hedging is easier said than done. Large currency deviations from budgeted rates -- all too common with today’s uncertain exchange rates -- increase the impact of currency moves on balance sheets, income statements and cashflows....

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