Changes in global interest rates put the spotlight on the high cost of carry for businesses hedging the FX risk on assets denominated in currencies that trade at a forward discount and/or liabilities denominated in forward premium currencies.

Forward Points

Key rule: with unfavourable forward points, delay hedge execution as much as possible with conditional FX orders

Conditional FX orders are orders to execute a spot or a forward transaction — but only when a predetermined limit is reached. In currency management, they are used in different ways:

  • Forward premium
  • Savings on the carry
  • FX risk under control
  • Additional advantages

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