cash flow hedging & swaps

Find out about fixing exchange rates and our flexible credit lines

FX Hedging

Wirepayer offers FX forward contracts which are an effective solution for mitigating currency risk. Forwards provide both certainty and flexibility for currency requirements, and they can be used to help protect profit margins, cash flow and your bottom line from currency fluctuations. When using currency hedging tools you can lock in a rate, avoid unexpected downward movements and keep costs within budget.

Open Window Forwards

A forward contract defines a specific future date to lock in a rate of exchange and transact the full amount of currency bought or sold. Our FX forward contracts offer an effective solution for mitigating currency risk, providing both certainty and flexibility for currency requirements.

 

By fixing a price against a budgeted rate, you can help lower business costs on imports and exports, and secure a specified exchange rate for future payments in a foreign currency.

 

An open window forward you can draw down any increment of the full amount of funds bought or sold up until the expiry date of the contract.

Flexible Credit Lines

Wirepayer offers attractive, flexible credit facilities for FX hedging to help clients secure favourable exchange rates and avoid currency fluctuations. Due to our position, purchasing power and extensive counterparty relationships, we are able to offer attractive, flexible credit facilities to accommodate deliverable FX hedging. Get in touch to find out more.

Example Scenarios

without securing a rate

with a forward

Example 1

Example 1

You import parts from Asia to Italy at a cost of $5,000,000 a month. The EUR/USD exchange rate is 1.25 so the cost to you in Euros is €4,000,000 a month.

Two years go by and the EUR/USD exchange rate has dropped to 1.09; the cost to you every month is now €4,587,156 - over half a million Euros more expensive each month.

You import parts from Asia to Italy at a cost of $5,000,000 a month. The EUR/USD exchange rate is 1.25 so the cost to you in Euros is €4,000,000 a month.

You forward buy three quarters of your next two year's exposure equaling $90,000,000 with our group company The Currency Account (see below) to secure the 1.25 exchange rate with an Open Window Forward.

Two years go by and the EUR/USD exchange rate has dropped to 1.09; the spot rate every month to buy $5,000,000 is now €4,587,156 - over half a million Euros more each month.

However, because you secured the EUR/USD exchange rate of 1.25 - you secured the companies cash flows.

Example 2

You export services from the UK to Singapore and exchange S$1,100,000 every month into GBP. The GBP/SGD exchange rate is 1.86 so you receive £591,398 every month.

A year later the GBP/SGD exchange rate has risen to 2.12, this means you now receive £518,868 each month; a loss of £72,530.

Example 2

You export services from the UK to Singapore and exchange S$1,100,000 every month into GBP. The GBP/SGD exchange rate is 1.86 so you receive £591,398 every month.

You forward buy £7,096,776 for one year selling SGD.

A year later the GBP/SGD exchange rate has risen to 2.12, this means that you would receive £518,868 each month; a loss of £72,530. However, because you secured the GBP/SGD exchange rate of 1.86 - you maintained your revenues.

Our Brands

The currency account

eXperts in fX

Speak to an expert at The Currency Account today and one of our dealers will guide you through the best solution for your business or large purchase.

 

Go to thecurrencyaccount.com to find out more
 

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