Foreign exchange services
Currency risk solutions for international business
We can help take the risks out of international trading with foreign exchange services that manage your currency risk.
Our client base includes major businesses and institutions. Our foreign exchange service covers solutions in over 60 currencies, through traditional and electronic delivery channels.
Key benefits
- A range of solutions – including spanning hedging, trading, investment and structuring
- Personalised approach – that gives you the precise solution your business needs
- Online solutions – that help you manage risk effectively and securely
- Economic analysis – expert analysis to support your planning, and individual briefing sessions with our economists and analysts
- Major options adviser – a market leader in the pricing of emerging market exotics
Spot FX
Exchange one currency for another at a fixed rate of exchange for immediate delivery.
More on Spot FX
Forwards
Protect your business against fluctuations in exchange rates in the future.
More on forwards
Forward Plus and accruals
Hedge your currency risk but still benefit from favourable movements in spot rates.
More on Forward Plus
Money market trading
Carry out a wide range of dealing services, including spot, forward and time option contracts, online.
More on Money market trading
Spot FX contracts let you exchange one currency for another at a fixed rate of exchange for immediate delivery – generally in two working days' time. Spot FX contracts aren’t designed to mitigate FX risk.
How it works
The rate of exchange of the contract is determined by a variety of factors including the number of buyers and sellers in the market and the current view of economic conditions in the countries involved in the trade.
Many variables can affect the market's view of the value of a currency, so spot exchange rates can be volatile. Our range of solutions to manage the risk of rate fluctuations includes forwards and swaps.
Forwards are contracts that allow you to protect your business against fluctuations in exchange rates in the future.
How Forwards work
A forward fixes the exchange rate now that covers the payment or receipt of foreign currency in the future. So no matter what happens to exchange rates prior to the settlement date, you know the value in sterling, for a given amount of foreign currency.
Features:
- Tailored solutions – Forward contracts are available over various periods of time making them easy to match to the precise needs of your business
- Strategic planning – available in major currencies, forwards allow you to plan international trade with greater certainty
- Flexibility – If the actual date of likely settlement is unknown or variable, we can organise a series of smaller-sized settlements covering a range of dates
- Trading confidence – forward contracts are legally binding on both parties
Forward contract alternatives
We also provide a range of specialist solutions using currency options which can be a suitable alternative to forwards.
These include Forward Plus – which limits FX risk and capitalizes on spot rate movements – and Accrual Forwards – designed for organisations that accumulate currency over a period of time.
With a Forward Plus contract you can hedge your currency risk at a known ‘worst case’ exchange rate, but still benefit from favourable movements in spot rates.
Using a Forward Plus - an example
A company wins a contract to supply goods and has to import the raw materials from the US, paying in US Dollars.
The company may want to hedge the payment costs as a separate contract - since their budget for the raw materials could be undermined by changes in the exchange rate –effectively increasing the cost of the raw materials.
The company arranges a Forward Plus based on a lower and upper exchange rate limit. This way, they set a limit on the maximum cost for the raw materials but still benefit from a move in the exchange rate which has the effect of reducing the cost.
Accruals
An accrual forward enables a company to accumulate a currency on a drip-feed basis at a rate that's attractive relative to the current forward market.
If the company cannot achieve the exchange rate it needs to hit its budget target through the outright forward market, an accrual forward could be the solution
Over 1,000 companies and organisations use our online FX services. This gives them the control, and security, to make real-time foreign exchange and money market transactions from a PC – keeping costs and paperwork to a minimum.
With our online foreign exchange and money market trading system, you can carry out a wide range of dealing services, including spot, forward and time option contracts.
Key benefits
- Real time information – read our analysis, trade and confirm your transactions all online
- Cost efficient – complete FX, MM and Global Treasury Fund trades electronically, to streamline processes and reduce costs
- Fewer errors – cut out the paperwork and see improvements in speed and accuracy
- Useful management data – easy to access management reports on your treasury activity
- Post trade – confirm your deals with in real time on our post trade application
- Transparency – with transparent benchmark execution offering a flexible framework for centralised global execution and transparency (audited to SAS70 TYPE II).
eCommerce products for high volume users
We offer complementary solutions for high volume foreign exchange users called FX micropay - please contact us for more information.