International BusinessForeign Exchange Risk Management
When you're doing business overseas, adverse foreign currency movements could wipe out your profits or worse. So isn't it worth getting protection against foreign exchange risk?
Foreign exchange risk explained
The most common cause of foreign exchange (FX) risk arises from
- Making overseas payments for your imports that are priced in a foreign currency
- Receiving foreign currency for your exports.
For example, suppose you are importing $100,000 worth of stock from a supplier in the Far East in three months time. If you simply wait and buy your US dollars in three months when you need to make payment, you have no idea how much that stock will cost you in sterling terms because of FX fluctuations.
Failing to protect against movements in foreign exchange rates effectively means buying or selling without having agreed a price in sterling. Can you afford to leave it to chance?
Exposure to foreign exchange risk can also arise from:
- Foreign currency borrowing or deposits
- Overseas subsidiaries
- Assets located overseas.
FX protection is an essential service for:
- Importers and exporters of goods and services
- Owners of overseas assets, joint ventures or partnerships
- Group companies and subsidiaries in more than one country.
How to get FX protection
Our specialist Global Markets team will work with you to develop a four point plan to help minimise your foreign exchange risk and protect your profitability.
- Understand your exposures
- Understand the solutions
- Develop a strategy
- Implement your plan.
To see the four point plan in more detail and how it could work for you download our guide: Identify and Manage FX Risk (PDF)
Important information
- Identify and Manage FX Risk (PDF)
- HSBC Global Markets monthly report (PDF)
- View FX and MM Trading demo.
Don't have Adobe PDF Reader? Download Adobe Reader
Speak to an expert about foreign exchange risk
Contact your nearest Global Markets Centre
Or speak to your local Relationship Manager
Not quite what you're looking for?
- Making and Receiving International Payments – a range of payment methods and related services
- Trade and Supply chain - HSBC EasyTrade – a simple and accessible solution for managing your Trade and Supply Chain
- Foreign Currency Account - International Business Account –easier global trading with good control of foreign currency cashflow
Speak to an expert about foreign exchange risk
- Contact your nearest Global Markets Centre or speak to your local Relationship Manager.
- Email us
Why choose HSBC?
- Access over 8,000 local experts in 63 markets
- Maximise international opportunities and guard against risks
- Manage your global banking from a single logon with our award winning HSBCnet
- Support and information including online guides, resources and forums.
FX Week Best Banks Awards 2011
HSBC is proud winner in 4 main categories including FX for Corporates (7th consecutive year), FX forwards, FX structured products and Emerging EMEA currencies. In the corporate segment, HSBC also won best bank for FX in London, research & strategy, FX in Asia-Pacific and emerging Asian currencies.
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