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Forecasting exchange rates and countering currency risk

Discussion in 'Business News & Resources' started by Currencies Direct, Apr 15, 2020.

Does your company trade internationally?

  1. Yes

    0 vote(s)
  2. No

    0 vote(s)
  1. Currencies Direct

    Currencies Direct

    Feb 6, 2020
    Forecasting exchange rates and countering currency risk

    "In the business world, the rear view mirror is always clearer than the windshield."
    ~Warren Buffet~

    Companies who trade internationally are exposed to volatile foreign exchange markets by virtue of transactions that are due for future settlement in different currencies.

    Accurate and reliable forecasting is therefore crucial if the company wants to evaluate the risks and benefits attached to the transactions they’re conducting – both on a trade-by-trade basis, but also in the context of the global business environment.

    Only with the benefit of hindsight can any market participant properly evaluate the success of a particular transaction or hedge decision. Therefore, all one can do is construct an acceptable process by which forecasts – i.e. an expectation about the future value or movement in exchange rates – can be utilised to support the treasurer in making informed decisions.

    The ability to accurately forecast potential future market movement is crucial in shaping the hedging decision making process, so a reliable in-house forecasting approach or forecasts provided by a 3rd party specialist are pivotal. The alternative is basing decisions on incomplete, irrelevant or misunderstood information, which doesn’t fit within any appropriate hedging policy....https://www.currenciesdirect.com/en...asting-exchange-rates-and-countering-currency

    EXCLUSIVE OFFER FOR TWF: Create an account with Currencies Direct and receive a £30 Amazon voucher when you trade +£5000 before June 30th! https://www.currenciesdirect.com/twf

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