Janice R. Andrews
Corporate treasurers are increasingly adopting foreign exchange options as currency fluctuations impact global earnings. A MillTechFX study found that over 75% of senior finance executives in the US and UK experienced losses from unhedged FX exposure in 2024.
In response to market instability, 32% of businesses plan to expand their use of FX options, while 26% intend to increase hedge ratios. Nearly one-third of companies also aim to extend hedge durations for better protection. MillTechFX CEO Eric Huttman noted, “Businesses want more flexibility amid unpredictable exchange rate movements.”
The US dollar’s 8% rise in 2024—its strongest performance since 2015—has weakened multinational profits. British companies faced additional challenges as the pound reached a two-year high before declining due to fiscal concerns.
With FX market uncertainty heightened by geopolitical changes and the 2025 US election, hedging costs have reached their highest levels since early 2020. Companies are now fine-tuning their risk management approaches to protect their finances from additional currency fluctuations.
