The talk of the town at AFP Conference 2018 was the importance of hedging. The majority of attendees were treasury professionals who deal with the concept of hedging every day, especially what it means in 2018 and looking ahead to 2019.
Treasury departments are growing concerned
When interest rates were essentially flat, there wasn’t much volatility in global markets, hedging was not top of mind to most corporate finance teams.
Today, volatility in the markets combined with increased tariffs and the unstable trade policies between the U.S. and China have treasurers keeping a close eye on balance sheets. Treasurers are concerned, and hedge accounting is a valuable tool to help mitigate these concerns and risks.
Moreover, interest rates in the U.S. have been steadily climbing – and the Federal Reserve may review rates three or four more times in 2019. All of this uncertainty has brought hedging to the front line of treasury departments.
It’s critical for companies to have accurate forecasts; arguably, it’s the treasurer’s most important job. Fluctuations in domestic and international interest rates, as well as, standard FX risk, and volatility in commodities' prices only make this job more complicated.
See Also: Volatility and Interest Rate Hedging
Everyone is looking for the right hedging strategy
Luckily, hedging is designed to protect your margins amidst all of this uncertainty and volatility. This is why outlining your hedging strategy has never been more crucial.
At the AFP Conference 2018, we heard from many companies about their struggles with hedging. Everyone knows it’s a critical piece of the financial puzzle, but it’s also highly technical and complicated.
People want to know how to get started or improve the program they have.
Hedge Trackers’ CapellaFX Software helps companies easily and efficiently hedge foreign exchange activity– but we know that they need support from more than software to solve their problems.
Our consultants have the ability to not only streamline the hedge accounting process, but also explain all of the ins and outs in a way companies can follow. We have a passion for helping you understand how to effectively manage your bottom-line and being a consistent resource as you embark on your forecasting efforts in such a volatile economic climate.
Conferences like AFP help us stay proactive with our approach to solving industry pain points, which is why we’re so excited for next years’ AFP 2019 in Boston. We’ll see you there!
Trying a new swap? Going into a new market with a new currency? Whatever you’re trying to do in the complex world of derivative accounting and hedge program management, Hedge Trackers can show you how to do it and do it better. Contact us today to get started.