Following the presidential win of Donald Trump and the ensuing dollar volatility, Privalgo emphasises the crucial need for companies with US dollar exposure to implement effective currency risk management strategies. The recent market fluctuations have sparked uncertainty, making it essential for businesses to navigate this period with vigilance and preparedness.
Matthew Clarke, Co-Founder and Chief Revenue Officer at Privalgo states that “the market’s struggle to settle on a winner indicated the closeness of the presidential race, fuelling fluctuations in the value of the US dollar post-election.”
The US dollar index (DXY) – a measurement of the dollar’s position against a basket of six currencies – surged by 1.6% on Wednesday as investors bet on Trump’s likely inflation-inducing policies slowing interest rate cuts. However, the DXY plunged on Thursday by 0.8%, highlighting the current uncertain climate.
Privalgo underscores the importance of monitoring global market conditions for further fluctuations. The company predicts a continued period of significant volatility, emphasising the need for vigilance and diligent currency management.
“We advise businesses to adjust their currency risk management strategies to mitigate potential losses amidst market uncertainties that arise,” continues Matthew Clarke from Privalgo. These strategies might include the following:”
– Hedging: Utilise forward contracts and currency options to safeguard future transactions against currency fluctuations.
– Multicurrency Accounts: Maintain accounts in multiple currencies for efficient fund management during favourable exchange rate fluctuations.
– Regular Market Analysis: Stay informed about market trends to make well-informed decisions in managing currency risks.
– Flexible Payment Terms: Negotiate adaptable payment terms to counter significant currency movements.
– Diversification: Spread operations and investments across stable currency regions to reduce risk exposure.
– Currency Clauses: Include provisions in contracts to adjust prices based on currency rate changes.
– Expert Advice: Seek guidance from financial experts specialising in currency risk management to tailor strategies for specific business requirements.
About Privalgo
Privalgo Limited is a leading foreign exchange provider committed to offering innovative solutions for businesses worldwide. As an authorised Electronic Money Institution regulated by the FCA, Privalgo combines extensive industry expertise with advanced technology to empower organisations to thrive in the dynamic global market. Website: https://www.privalgo.co.uk.
For media enquiries or further information on optimising currency risk management strategies, please contact Privalgo at +44 (0) 20 3880 0575 or via email at hello@privalgo.co.uk.
