Commentary
Is AI going to be the way we manage currency hedging going forward? Are we now able to automate FX trading and hedging?
These questions are being asked more and more – so, at CompleXCountries, we decided to hold a call to get some direct input. As always, the sample is too small to be statistically valid; but the comments in the detailed report below give a valuable insight into what treasurers really think.
As always, any discussion on hedging shows just how much the approach varies between companies. Some of our peers hedge the balance sheet; some hedge cash flows; some hedge both; while one also hedges net profit. Some peers have a highly programmatic, rules-based approach – these are the closest to automating the entire process. Others have latitude to take views and add value by deciding when and to what extent to intervene – unsurprisingly, these processes are the most likely to be primarily manual.
Despite these differences, the call showed a surprising degree of convergence on automation.
- No peer allows the systems to execute hedging trades without human control and intervention. Several peers have automated feeds into their TMS from either the ERP or the financial planning system, or both. The hedging.......
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