In international trade you need to consider how to manage your currency risk. Currency fluctuations can have a direct impact on your bottom line and make planning and budgeting difficult. We can help you protect against that type of risk.
If you’re involved in foreign trade - whether it is imports or exports - it makes sense to use your trading partner’s domestic currency whenever possible and do the exchange with Nordea. For example, a Swedish customer pays you in SEK instead of EUR, and Nordea converts them into EUR. It can give you a competitive advantage by:
However, carrying the currency risk yourself means you should hedge against it, for example by using Forward with Time Option.
Forward with Time Option can help you manage currency risk by fixing the euro value of your payments in foreign currency for up to two years. For example, if you make payments in USD, we can agree on a fixed exchange rate for your future USD payments for the agreed period.
When entering into a Forward with Time Option, agree on the amount, maturity date and exchange rate. Please note that once signed, the agreement is binding for both parties. It means that if we agree on a Forward with Time Option for 200 000 USD for one year, you must use the whole amount within the year. However, you can use the fixed rate at anytime and in as many instalments as you wish during the agreed period.
Forward with Time Option is a financial derivative and you must be aware of and understand the potential risks of the product. The Forward with Time Option agreement is binding, regardless of what happens to the exchange rate and the commercial agreements that you intend to hedge.
Please note that an unused contract can cause FX loss or gain.
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