Need to hedge against exchange rate risk and currency market fluctuations
In an increasingly globalised world, businesses often operate beyond national borders, conducting transactions in various currencies. This internationalisation exposes companies to a major financial risk: currency exchange rate fluctuations.
Protecting against these fluctuations is not just an option but a strategic necessity to ensure the financial stability, competitiveness, and sustainable growth of the company.
Understanding foreign exchange risk
Foreign exchange risk arises when fluctuations in exchange rates affect the value of a company’s international transactions. For example, a European business importing raw materials priced in US dollars might see its costs rise if the euro depreciates against the dollar. Similarly, an exporting company could face a drop in revenue if its customers' currency weakens in relation to its own. These fluctuations can have a direct impact on profit margins, profitability, and the company’s financial predictability.
The consequences of inadequate foreign exchange risk management
Impact on profitability
Unfavourable exchange rate fluctuations can reduce profit margins, making financial forecasts uncertain.
Budgetary uncertainty
Unexpected currency fluctuations complicate budget planning and cash flow management.
Loss of competitiveness
Higher costs or reduced revenues can make the company's products or services less competitive in the international market.
Impact on valuation
Investors may perceive an increased risk, thereby affecting the company's valuation and its ability to raise funds.
Hedging strategies against exchange rate risk
To mitigate these risks, companies can adopt various hedging strategies, such as forward contracts, which allow them to lock in an exchange rate for a future transaction, for a period of up to 24 months, providing certainty regarding costs and revenues. These contracts are customizable but require the execution of the transaction.
Why Devyzz is the ideal partner for currency risk hedging
Ultra-competitive exchange rates
Save up to 3% compared to your traditional bank.
Tailored solutions
Our experts work with you to develop a hedging strategy tailored to your risk profile and financial goals.
Advanced technology
Our online platform allows you to manage your currency hedges in real time, enabling you to adjust your strategies with just a few clicks.
Strategic partnerships
Devyzz collaborates with giants in Tech and Finance, enabling efficient currency management and providing integrated solutions that benefit all stakeholders.
Direct access to our Trading Floor for expert insights
In traditional banks, access to a trading floor, where exchange rates are negotiated in real-time by experts, is typically reserved for the most privileged clients. At Devyzz, this access is open to all our clients, whether they are a small business or a large import/export group.
By leveraging the expertise of our currency specialists, all with a minimum of 10 years of experience, you can not only secure the best rates but also receive guidance on complex topics such as currency swaps or hedging options.
Practical example: a hedging strategy with Devyzz
Let's take the example of a UK company that exports goods to the United States and imports raw materials from Japan. Without hedging, this company is exposed to fluctuations in the GBP/USD and GBP/JPY exchange rates, as it is paid in dollars and settles its Japanese suppliers in yen. By using Devyzz, the company can:
Receive support from an expert with at least 10 years of experience in the foreign exchange market
Lock in exchange rates for up to 24 months by paying only between 0% and 5% of the total contract as a deposit
Use our platform to manage their strategies at any time
Thanks to these strategies, the company can better plan its finances, secure its margins, maintain its competitiveness, and focus on its development without worrying about fluctuations in exchange rates.