Time to play the FX markets again?

Vedanta Hedging was interviewed by Euromoney about the divergence of FX spot and Forward rates.

After years of being off the table due to historically low interest rates,treasurers can now realistically look to profit from rate differentials between currencies.

The main way to negate unfavourable forward points is to consider option strategies suggests Abhishek Sachdev, chief executive of Vedanta Hedging. These can be vanilla (such as simple cash options) or more complex ‘zero-cost’ structures where protection is still obtained but there is some ability to benefit from favourable FX movements.

Being opportunistic and trading at the right time can help treasurers make the most of favourable market moves that may well exceed the impact of unfavourable forward points. However, this requires access to a proactive FX provider and high-quality analysis.

Vedanta Hedging will never advise corporates to speculate on FX markets and should only consider the use of derivatives for genuine commercial hedging purposes only.

The full article can be seen here:

Abhishek