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Currency Risk

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The BOQ SmartFX platform is a secure international payment tool allowing businesses to manage foreign currency accounts, book foreign exchange rates, make foreign currency payments for current or future value, and buy or sell currencies at specified rates. All of these features create more certainty over the risks associated with currency management. Managing your overseas transactions through the likes of BOQ SmartFX can allow for the protection of cash flow and profit margins; improved financial budgeting and a better understanding of how currency fluctuations impact your balance sheet.

There are numerous other methods of reducing currency risk.  One option is considering safe-haven currencies. Traditionally the Swiss Franc, the U.S Dollar and the Japanese Yen have been expected to retain or even increase in value when there is geo-political stress or even a global pandemic as risk assets are sold off.

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If you’re an investor or business owner who transacts on financial assets outside Australia, you’re more than likely exposed to some form of currency risk, throwing your projected earnings into a world of unpredictability.

Currency risk rears its head when the value of the currency your investments are denominated in fluctuates in price compared to another, which, given the volatile nature of the global market, can occur frequently.

To counteract this potential threat, investors and companies often opt for safeguarding measures such as mutual funds which theoretically reduce the volatility of your financial stakes, or foreign exchange hedging - the process of offsetting fluctuations in foreign currency and protecting your investments from negative outcomes, using a foreign exchange platform like BOQ SmartFX.

How to know if your investments are exposed to currency risk – and what you can do about it

However, if you do choose to go down the more conventional FX hedging path, BOQ SmartFX can be the tool to control  exactly how you plan currency risk and manage day-to-day FX exposures with intuitive reporting and management controls. And if you need the support of an expert to help you make the right choices for your situation our experienced team is a phone call away.

If you’re interested in how BOQ SmartFX can assist, you can find more information here.