Corporate FX hedging surges in Asia

Declining forex implied volatility is driving increased hedging among Asian corporates. While dealers report rebounding risk appetite for options and structured products, treasurers continue to rely on forwards and futures to carry the bulk of their hedging programmes. New bank capital requirements, however, could further enlarge the role of structured solutions.

Forex fix: Asian corporates are looking to lock down dollar rates

After a period of pullback and reduced hedging activity during the first quarter of the year, Asian corporates are re-entering the market intending to lock away current dollar levels.

“There has been a definite pick-up in activity in the Asia-ex Japan foreign exchange derivatives market,” says Michael Image, head of foreign exchange structuring at Standard Chartered in Hong Kong. “The clear US dollar trend has been a key factor here with Asian exporters increasing their hedging ratios and

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