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Foreign Exchange Archives - NeuGroup

Technology
February 7, 2024

Taking Advantage of the Cloud Stall

Smart treasuries are building and testing solutions to drive transformation, not waiting for cloud-based ERP implementations.By Joseph Neu NeuGroup’s 2024 Treasury and Finance Agenda Survey provides a backdrop that helps illuminate how smart treasuries are not letting what I have dubbed the “cloud stall” impede their progress toward digital transformation. The stall occurs when treasury waits for an enterprise to implement a cloud-based ERP—and the treasury functionality ERP vendors are developing—to drive technological advancement. By contrast, smart treasuries are taking advantage…
Justin Jones
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FXTechnology
March 16, 2023

Advancing Analytics: FX is Embracing AI and ML

Rising pressure to protect earnings from currency volatility is prompting FX risk managers to pursue more advanced analytics.Sixty-nine percent: That’s the percentage of participants in a recent NeuGroup for Foreign Exchange monthly session who are already using or are exploring the adoption of advanced analytics solutions. Their reasons include improving the quality of the FX exposure forecast, conducting scenario planning and having a more refined capability to measure hedge program performance in terms of volume, effectiveness and cost. A sweeping trend. The pursuit…
Justin Jones
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Foreign ExchangeNeuGroup News
March 10, 2023

NeuGroup for Foreign Exchange Gather at Starbucks Headquarters

This week, NeuGroup Peer Group Leader Julie Zawacki-Lucci had the extreme pleasure of visiting Starbucks headquarters for the 2023 first-half meeting of the NeuGroup for Foreign Exchange. Members mastered the art of lattes with personal barista trainings, viewed breathtaking Chihuly glass sculptures by the Space Needle, and worked through the weeds of current risk management challenges. Compelling presentations and active roundtable discussions centered around taking the noise out of balance sheet hedging, the impact of rising rates on net investment hedges, automating…
Jacob Bromsey
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FX
March 2, 2023

Lowering the Volume on FX Noise in the P&L

Higher interest rates and economic uncertainty have treasuries taking a long look at FX risk management programs. Recent signs of economic strength and enduring inflation have raised the specter of more interest rate hikes. This does not come as a surprise to NeuGroup members: In the Treasurers’ 2023 Agenda Survey, they ranked political and financial volatility as second and third on their list of risks for this year. That’s up from fourth and fifth place in 2022. Increased scrutiny. While economic and…
Justin Jones
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FXTechnology
January 12, 2023

Seeing Is Believing: Micron Collaborates With Procurement To Cut Costs

Treasury at Micron is partnering with the procurement team to mitigate financial risk from supplier contracts. The US dollar and commodity price strength have provided treasury an opportunity to demonstrate its capability to accurately mitigate a company’s financial risk exposure. They have also increased awareness about the consequences of commodity and FX fluctuations at the business-unit level. Micron Technology, a semiconductor company with global operations and heavy manufacturing in APAC, is US-dollar functional across its enterprise. Therefore, procuring tools and…
Justin Jones
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FXTalking Shop
January 5, 2023

Talking Shop: Comparing FX Trading Setups

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses:  [email protected]. Member question: “We have started a big FX global project and we would like to discuss other setups where you leverage FXall as a trading platform with full integration to a TMS and payments solution and with a global footprint for trading. “Does anyone have a FX trading desk and systems setup similar…
Justin Jones
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FX
September 30, 2022

To Hedge or Not to Hedge FX Exposures When Volatility Spikes

Pausing a hedging program risks undermining the perceived value of hedging by senior executives and the board. “Should we stop hedging?” The surge in the US dollar this year against other major currencies has prompted some FX risk management teams to ask that question as well as others about hedging strategy amid disruptive volatility, bankers at Wells Fargo said at a fall meeting for NeuGroup for Foreign Exchange sponsored by the bank. The questions come amid a big jump in…
Justin Jones
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FXTalking Shop
September 15, 2022

Talking Shop, FX Edition: EUR Forwards; Hedging Depreciation

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected]. Member question 1: “Going out to one year for EUR, what size tranches are you trading for EUR forwards? Could I trade $10 million-$20 million? $20 million-$30 million? Peer answer 1: “The one-year EUR forward is pretty liquid, but to keep the spread narrow, we typically keep our size under USD 30 million equivalent…
Justin Jones
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FXTalking ShopTechnology
August 11, 2022

Talking Shop: Benchmarking Cash Flow Hedging

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected]. Member question: “Here are some benchmarking questions about cash flow hedging: 1. “What percentage of cash flow exposures do you hedge?2. “What instruments do you use to hedge?3. “How far into the future do you hedge?4. “Given the current strength of the US dollar, are you contemplating changing your FX hedging program?” Peer answers, question 1 (hedge…
Justin Jones
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FXRegional
July 14, 2022

Righting the FX Hedging Ship After a Perfect Storm

Lessons learned and changes made after a plunge in JPY reveals cracks in communication and processes. The plunge of the Japanese yen (JPY) this year to its lowest level against the US dollar in more than two decades (see chart) revealed communication problems at one NeuGroup member company between FX risk managers in treasury and the sales team in Japan—problems that could have resulted in a painful financial outcome. Instead, the company’s treasurer came away with valuable lessons for any…
Justin Jones
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