FX rate risk

Manage your FX rate risks

Companies with income, expenditure, liabilities or assets in a foreign currency are exposed to fluctuations in foreign exchange rates. FX rate fluctuations may cause material variation in earnings, cash flows and the balance sheet. There are many alternatives for the hedging of FX rate fluctuations.

FX hedging products are suitable for hedging cash flows that are based on specific transactions or that are otherwise foreseeable. FX hedges are used to reduce the risks related to foreign currency loans, investments and assets. Nordea’s experts assist companies in the management of FX rate risk and the selection of suitable hedging products.

Examples of situations involving FX rate risks

• The company has income in a foreign currency.
• The company has bought a piece of machinery for example from the United States, and payment falls due in US dollars in three months.
• The company has a subsidiary outside the euro area.