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How companies hedge currency risk

Currency hedging is important for Swiss companies. In a major survey, they explained why they hedge currency risks and what risks they expect.

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Companies protect themselves from fluctuating prices through currency hedging

Most Swiss companies have strong international ties. They encounter fluctuating prices in EUR and USD as well as other foreign currencies directly. The Credit Suisse corporate client survey shows that only a sixth of the companies surveyed do no business outside Switzerland. That's why the majority hedge some or all of their currency risks.

Expectations for the exchange rates

However, the study also shows that nearly a third of the companies do not hedge transactions in EUR; one in four don’t hedge transactions USD. Therefore, they are fully exposed to currency risks. For 2019, the companies surveyed anticipate moderate exchange rate changes. They are doubtful about a strong upturn in Europe and accordingly, no resurgence on the part of the euro.

 

How companies hedge currency risk?

Get Views on the development of exchange rates in 2019 here.

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