With volatile global foreign exchange markets, daily FX exposure monitoring should be an integral part of your routine. Real-time visibility of currency positions encourages proactive, rather than reactive, risk management. Regardless of whether you are exposed to one currency pair or many we believe you should be monitoring your FX exposure on a daily basis – here’s why.
Why Daily FX Exposure Monitoring Matters
Having a clear view of foreign exchange positions gives you the ability to track the impact of currency movements as they happen. As a general rule, making many small hedging decisions is going to be a less risky strategy versus making large, infrequent calls.
Foreign currency cashflows in local currency terms will be more stable and ensures hedging decisions are kept in line with the company’s treasury policy. It is functionality Hedgebook has prioritised in developing its FX Exposure Tool.
Hedgebook customer Tait Communications, operates in 17 countries and almost as many currencies. It highlights the importance of this approach as Jeff Situ, Tax and Treasury Manager, explains:
“(Hedgebook) creates a nice graph showing the rates and tells you your percentage of exposure as well as timing of the deal… I can monitor all the percentages of our hedging deals and exposures any time that I want, from anywhere I want, as it is a cloud platform.”
Implementing Daily FX Exposure Monitoring
So how to get started? Firstly, you need to centralise all your foreign exchange contracts and derivative positions into a single view. Logging each deal into the system provides a complete and current picture of your FX exposure.
From there, Hedgebook generates clear visual outputs – such as graphs and scenario analyses – to show where the pressure points are with regards to FX exposure. The FX Exposure Tool enables you to model a range of different scenarios across the currencies you operate in. It means you can very quickly see the impact a change – up or down – might have, and how that sits with your Treasury Policy and against budget rates.
It creates a deeper understanding of the impact any change in FX rates might have – and models that on a daily basis.
Benefits Beyond Compliance
Operating within a secure cloud-based solution brings additional benefits. Tait’s team found value in the ability to share access with its external advisors. Jeff notes:
“Our external advisors have the ability to monitor our deals and scenarios before our monthly treasury catch-up, which is really helpful.”
This means that risk conversations are informed by real data, enabling quicker, smarter decisions.
Automating what were previously manual processes not only makes daily FX risk management possible it delivers meaningful time savings. Time once spent wrangling spreadsheets to manually model change, is now invested in more meaningful strategic planning and timely action.
Daily FX exposure monitoring ultimately turns a traditionally time consuming, administrative task into a strategic business lever. It gives you the ability to spot risk early, ensure consistent compliance with policy, and make confident, informed decisions that can have a direct and positive impact on business outcomes.
If you’d like to take a look at how this might work for you – have a look at our FX Exposure Tool overview video or reach out for a quick demo.