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US COMPANIES RETURN TO CURRENCY OPTIONS TO HEDGE ELECTION AND MACRO RISKS

  • NEWS Desk Global
  • Aug 28, 2024
  • 1 min read



U.S. corporations are turning to foreign exchange options again to protect their cash flow as they fear the U.S. presidential election and diverging central bank interest-rate policies could spark a period of currency volatility.

Currency swings, which can hike costs, disrupt cashflows and dent earnings, are far less pronounced than from 2020 to 2022, making option hedges cheaper than before. Prices soared during the COVID-19 pandemic and as central banks started hiking interest rates to tame inflation.

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