Maximizing the effectiveness of an FX risk management program
A global manufacturer and consumer retailer experienced a negative impact to earnings per share due to FX volatility and wanted to benchmark its current strategy against leading practices.
Company goals
- Quantify FX risk for the entire organization.
- Determine effectiveness of current hedging program and identify areas for cost savings.
- Redesign FX risk management strategy to balance both strategic and operational needs.
Results
- Identified an improved FX risk management strategy that mitigated an additional $20 million of risk and improved efficiencies by reducing costs.
- Tailored a strategy which addressed forecast uncertainty, operational constraints, and hedge accounting feasibility.
- Customized roadmap for implementing new strategies into current processes and policy.
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Disclaimers
Chatham Hedging Advisors, LLC (CHA) is a subsidiary of Chatham Financial Corp. and provides hedge advisory, accounting and execution services related to swap transactions in the United States. CHA is registered with the Commodity Futures Trading Commission (CFTC) as a commodity trading advisor and is a member of the National Futures Association (NFA); however, neither the CFTC nor the NFA have passed upon the merits of participating in any advisory services offered by CHA. For further information, please visit chathamfinancial.com/legal-notices.
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