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Currency hedge

A currency hedge or foreign exchange hedge is a financial transaction designed to protect and mitigate risks in one’s financial results such as earnings, cash flows, or value of foreign assets and liabilities arising due to movements in foreign exchange rates, typically with hedging transactions producing an offsetting profit-and-loss profile.

Large multi-national companies have complex hedging programmes and processes to meet one or multiple objectives: balance sheet hedging, forecaster transaction hedging or economic hedging.

Smaller businesses most often use currency hedges to protect their profits or cashflows from currency swings using either traditional hedging instruments such as FX forwards or options or new solutions such as prebooking guaranteed exchange for their invoices & bills with HedgeFlows.

Booking foreign exchange at guaranteed rates for the future date with HedgeFlows is a currency hedge that guarantees the value of your foreign currency invoice or bill in your home currency regardless of where the change rate will be before the expiry of your prebooked exchange.