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Three key steps to making an informed FX hedging decision

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In times of heightened FX volatility, it is important to be aware of the impact that a change in FX rates can have on your project costs or investment returns.  By applying the three-stage methodology highlighted in our infographic, it is possible to make a clear, informed hedging decision that allows you continually to monitor your exposure throughout the life of a portfolio of investments. 

There are three key steps to being able to make a well-informed FX hedging decision. 

You need to understand:

  1. Key performance metrics and the assets involved
  2. The impact of exchange rate movements on these key metrics
  3. The costs and benefits of a hedging program

At the same time, it is important to recognise that deciding not to hedge may also be a perfectly acceptable strategy, providing that the decision comes about as a result of the rigorous analytical process outlined below.
 

JCRA_Steps_FX_Hedging_Infographic_2017

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