Business FX
A considered approach to currency exposure.
Understanding where your business is exposed to currency movement, and deciding deliberately how much of that exposure you want to carry.
Start with the exposure, not the product
Currency risk management is often presented as a set of products. In practice it starts earlier: knowing which parts of your business are exposed, over what period, and what a movement in the rate would actually do to your margins.
Once that picture is clear, the question becomes a policy one — how much uncertainty is acceptable, and over what horizon. The tools follow from the answer.
Approaches compared
Three ways businesses typically approach exposure
| Spot | Forward | Staged | |
|---|---|---|---|
| When the rate is set | At the time of exchange | When the contract is agreed | Across several dates |
| Certainty of cost | Known only on the day | Known in advance | Partly known in advance |
| Commitment | None until you deal | Binding for the agreed date | Binding for each tranche agreed |
| Often suits | Immediate needs | Known future payments | Regular or uncertain flows |
What this covers
How we work with businesses on this
Exposure mapping
Identify where currency movement affects your revenue, costs and margins.
Policy discussion
Agree how much exposure your business is comfortable carrying, and over what period.
Practical tools
Apply spot and forward contracts in line with that policy rather than case by case.
Ongoing review
Revisit the approach as your trading pattern, volumes or markets change.
Who this is for
Built around how you trade
- 01
Businesses with regular foreign currency costs or income
- 02
Finance teams who need to protect a budget rate
- 03
Directors reviewing how currency affects margins
What to prepare
Have these to hand
- 1A view of your expected currency flows
- 2Key dates in your trading cycle
- 3Your budget or costing rates
- 4Any internal policy on currency
Before you proceed
Things worth knowing
- Nothing here constitutes financial, investment or hedging advice. Consider taking independent professional advice on your specific circumstances.
- No approach eliminates currency risk or guarantees protection against adverse market movement.
FAQ
Common questions
No. We explain how the available tools work and help you apply them to your own decisions. We do not provide investment or hedging advice, and you should consider independent professional advice.
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Ready to discuss currency risk management?
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