Thought Leadership Courtesy of FiREapps
The fall of the Russian ruble portends rough seas ahead for multinational corporates. It is the kind of crisis that will separate the effective risk managers from the rest — rewarding those corporates that can manage through intense volatility, and punishing those that can't.
Currency surprises can generate ripple effects that impact the company over the long-term, far beyond that quarter. In many cases those longer-term impacts are not well understood, because they’re not as immediately visible; they’re below the surface. (Turn to page 22 for the full article.)
Companies don't have a good grasp of what's going on in their foreign exchange (FX) processes, and most don't have plans to change that fact in the near future. Those are the key results of a series of polls conducted during a recent Treasury & Risk webcast sponsored by FiREapps.
Successful currency risk management requires exposure data you can trust. These best practices can help get you there.
In the first quarter of 2014, European corporates reported €3.08bn (US$4.19bn) in negative currency impacts on earnings, while in 2013 the full-year impact amounted to US$17.8bn. As they reported in their earnings calls, these corporates were affected specifically by the US dollar (USD) and emerging market (EM) currencies.
There was a time when only currency traders cared about currency moves. Those days are long over.
It wasn’t too long ago that emerging markets were seen as the saviors of the global economy. In 2009, when advanced economies’ gross domestic product (GDP) fell 3.43 percent, emerging market economies grew 3.1 percent. Capital poured in – from investors looking for the only place they could actually grow their money to multinational corporations investing directly in facilities and equipment.
It is the end of the year, which means it is time for predictions on what the coming year has in store. In this article the author offers his own; in 2014, a strengthening US dollar (USD) and its impacts will surprise - and are likely to hurt - those who are not prepared.
Investors, boards, CFOs, and corporate treasurers take heed: in 2014, the U.S. dollar and its impacts will surprise those who are not prepared.
Not because 2014 will be the year a digital currency like Bitcoin kills the banknote (it won’t be). And not because the Chinese yuan is taking over the world (it isn’t).
Currency volatility made a heavy dent in the revenues of many multinational corporations (MNCs) last year. The interconnectedness of global economies and worldwide operations of many businesses expose treasuries to currency impacts and this article suggests that adopting a portfolio approach is the best way for companies and their treasury to address foreign exchange (FX) risk.
In 2012, US-based multinational corporations (MNCs) are estimated to have lost around US$50bn in revenue because of unmitigated currency volatility. For the past two years FiREapps has analysed the quarterly earnings calls of a subset of Fortune 2000 companies where 15% or more of their international revenue is in at least two currencies. The aim is to provide insight into how currency fluctuations affect MNCs.