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FX Initiative Blog

Actionable insights on foreign exchange risk management from FX Initiative.

Conquering Currency Risk Management

Conquering currency risk management involves identifying, analyzing, and prioritizing various foreign exchange (FX) exposures, and developing and implementing a coordinated and systematic plan that utilizes company resources efficiently and effectively to mitigate and optimize FX risk. An important part of mitigating FX risk is hedging exposures such as revenues, expenses, receivables, payables, assets, liabilities, and equity.

The degree to which companies implement adequate foreign exchange risk management practices can vary substantially, from not managing the risk at all to engaging in robust hedging activities. As a result, the FX impact on the bottom line can vary widely across organizations.

Global companies face questions including, but not limited to: How to manage currency risk? How to draft a FX risk policy? Where to look for FX risk exposures? What currency risks to hedge and how? Which strategies meet FX hedge objectives? What are the economics? How to do FX accounting? That's a lot of questions! It's time to take the FX Initiative!

FX Initiative's foreign exchange risk management training starts with watching our online video series about:

  1. Foreign Exchange (FX) Market Overview
  2. FX Risk Exposures
  3. FX Risk Management
  4. FX Spot & Derivatives
  5. Hedging FX Transactions
  6. Hedging Foreign Subsidiaries

Then, review and test with quizzes and CPE exams, and reinforce learning using real examples with our:

FX Initiative training is available 24/7 365 to help you with FX risk policies, FX accounting, FX hedging strategies, FX risk management, and more.

Are you ready to manage FX risk? Become a FX Initiative subscriber today and access our complete suite of foreign exchange (FX) continuing professional education (CPE), examples and events at FXCPE.com. Managing FX risk has become a higher priority for many firms in 2020 and it is now easier than ever to learn the fundamentals of currency risk management. Make this the year to reduce FX risk and reap rewards abroad by taking the FX Initiative for your international business today!

Tracking FX Transaction Types (Video)

Tracking FX Transaction Types (Video): Explore the 4 kinds of FX transactions using Apple as an example.  This video is a preview of FX Initiative’s FX Risk Exposures course as part of Learning Objective #1.

 

To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com.

 

FX Net Investment Hedging Nuances

Would you like to know the nuances of FX net investment hedging? FX Initiative’s FX Net Investment Hedging webinar explores how multinational corporations can hedge assets and equity in foreign subsidiaries, and demonstrates the importance of formally designating derivatives as net investment hedges for accounting purposes to benefit from reporting FX gains and losses in equity on the balance sheet. Get started with our foreign exchange risk management training, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples and events at FXCPE.com. Start Training >

 

 

FX Strategies for Foreign Subsidiaries

Would you like to optimize FX strategies for foreign subsidiaries? FX Initiative’s Hedging Foreign Subsidiaries course outlines the fundamentals of hedging net income and net investment exposures in foreign subsidiaries, and reveals the cash flow and financial reporting implications of hedging FX translation risk with currency derivatives. Get started with our foreign exchange risk management training, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples and events at FXCPE.com. Start Training >

 

 

Attend the Net Investment Hedging webinar!

You're invited to the

Net Investment Hedging webinar!

Thursday, November 15th | 2PM Eastern | 1 CPE Credit

Program Overview
Join us for a live webinar and learn how to hedge assets & equity in foreign subsidiaries operating abroad. This 1-hour session covers 4 key learning objectives:

  1. Discover the concept of a foreign exchange (FX) net investment hedge.
  2. Recognize the accounting and cash flow implications of hedging subsidiaries.
  3. Identify the top reasons why some corporations employ net investment hedges.
  4. Explore how forward contracts can be used to hedge equity in foreign operations.

Who Should Attend
New and seasoned finance, accounting, treasury, and related professionals (CPA, CIA, CRMA, CFE, etc.) interested in international business.

Learn How to Test FX Transaction Hedges

Do you test the economic and accounting implications of your FX hedge strategies prior to trading? Testing by definition involves checking the performance of something before putting an idea into practice. This is a prudent and practical step to take when managing foreign exchange risk across the enterprise. When it comes to hedging specific foreign exchange transactions, companies can benefit greatly from testing the most common derivative strategies such as forwards, options, and collars, stress testing the economic scenarios, and comparing the accounting treatment available. By employing this approach, companies can more reliability predict both the cash flow and financial reporting implications of a hedged FX transaction.

FX Initiative’s FX Transaction Simulator allows companies to input their ”assumptions" such as exchange rates, interest rates, and market volatility, as well as company specific variables such at the transaction dates, the amount of the transaction, and the desired hedging strategy. Correspondingly, these assumptions are reflected in our proprietary risk analysis model which visually charts the payoff profile of the selected hedge strategy, ranks the economic performance of the alternative spot, forward, vanilla option, and collar strategies side by side, and displays the accounting debits and credits for default and elective accounting treatment. The following 2 minute overview video shows the 3 steps involved in using the FX Transaction Simulator:

 

Want full access? Click to subscribe today!

 

If you are interested in testing your FX transaction hedges prior to trading using the FX Transaction Simulator, sign up for our Foreign Exchange Risk Management Training today and access our complete suite of foreign exchange (FX) continuing professional education (CPE), examples and events at FXCPE.com. Managing FX risk has become a higher priority for many firms for 2017 and it is now easier than ever to learn the fundamentals of currency risk management. Make this the year to reduce FX risk and reap rewards abroad by taking the FX Initiative for your international business today!

Click here to start your FX Risk Management Training today!

Cheers to your global organization's continued success in the new year,

The FX Initiative Team
support@fxinitiative.com

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