The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

British corporates don’t understand currency movement, warns survey

Widespread ignorance in British business over currency trading and a lack of knowledge about hedging are the key conclusions from a recent survey by Travelex, the foreign exchange specialist.

Half of the businesses surveyed had no understanding of hedging at all, while four-fifths felt that though currency movement was important, they declined to use any FX tools to guard against the risk.

"People have made hedging into something far more complicated than it is when in reality it is only insurance against currency fluctuations," notes Yogesh Shetty, group director of commercial foreign exchange at Travelex.

Payment decisions, according to the survey, are invariably allocated to administrational staff with little or no expertise in the area, and for whom FX transactions form only a small part of their job function; 90% made spot payments due to lack of knowledge and minimal internal controls.

"Everyone understands insurance because it is part of our everyday lives but somehow hedging has been given this veil of mystique," adds Shetty. "Most of the blame for this mystique and confusion stems from traditional dealers who don't sell the benefit of mitigating risk, but sell jargon-based products, which both confuses and scares their customers."

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree