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Limited-loss hedges help US firms dodge costly FX moves

Structurers say corporates’ use of options-based net investment hedging helped soften impact of USD selloff

A row of falling dominoes on a table halted by an unyielding red domino in centre of image

Foreign exchange structurers are seeing increased demand from US corporates for options-based hedges that can limit losses on their net investment hedges caused by the US dollar’s selloff.

While the economic value of derivatives hedges offsets changes in foreign assets, when those positions hit maturity companies can face hefty mark-to-market payments.

Bank structurers, though, say companies with

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