What Changed? | The dollar doesn't have to surge for FX to hit earnings. When rates diverge and volatility flickers, the cost of keeping results "smooth" rises — and that cost often lands in places models don't cleanly capture. | Most investors still treat currency as a translation line: reported revenue and EPS go down when the dollar is strong, and up when it's weak. But the bigger earnings-quality question is what it takes to neutralize that volatility — rolling forwards, paying option premia, and living with rate-differential "carry" embedded in hedge pricing. | BIS data frames why this matters now. In 2025, hedging activity moves to the center of FX market structure as investors adjust exposures, not just spot positions. That shift makes CFO outcomes less about where EUR/USD prints on the last day of the quarter and more about what treasury had to pay to keep guidance intact. | | White House Insider Reveals Trump's Handwritten Letter
It's no secret that 2026 will be a very special year for American patriots like you… | But what most people don't know is that… | This coming May, just a few weeks before America's 250th anniversary… | President Trump is planning to use executive powers granted by Public law 63-43 | To make a critical move that I predict will unleash a historical supercycle of wealth… | That will make a lot of patriots rich. | And if you click here and learn what to do, you could be one of them. | As a former advisor to the CIA, the Pentagon and the White House… | I've seen a hand-written letter from President Trump about what's coming. | Click here to see the letter for yourself… | And you'll understand exactly why this "gift" could be a game-changer for America in 2026. | | The Numbers | The Fed's federal funds target range upper limit is 3.75% as of January 15, 2026. The trade-weighted nominal broad dollar index is 120.5856 (Jan 2006 = 100) as of January 9, 2026. BIS reports global FX turnover averaged $9.5 trillion per day in April 2025 — up 27% from April 2022. Versus April 2022, BIS notes spot turnover rose 42% and forward trading rose 51%; options turnover rose 108% while FX swaps rose 6%. The Cboe EuroCurrency Volatility Index (EVZ) is about 7.51 in mid-January 2026.
| | Why It Matters | Hedging isn't free, and the price isn't stable. For many U.S. multinationals, the economics of FX forwards and swaps are heavily shaped by interest-rate differentials — and those differentials have been a defining feature of this cycle. Even if spot FX goes nowhere, the "forward points" a company locks in can create a recurring carry cost (or benefit) that drips into margins and below-the-line items quarter after quarter. | The second-order effect is guidance divergence. Two firms can have similar overseas revenue exposure and still report very different "FX impacts" because their hedge programs aren't comparable. One has natural offsets (local costs, local debt, matching cash flows) and a policy-driven ladder of hedges that rolls gradually. Another relies on shorter-dated protection, meaning each quarter is a reprice into current rate gaps and volatility. | BIS's point that forwards and options activity surged in 2025 is the tell. When hedging becomes the dominant motive, the market is effectively setting a more visible price on stability. For investors, that turns "FX headwinds" into a higher-quality question: is management talking about translation, or about the cost of buying certainty? | Takeaway | Currency risk is increasingly a cost-of-stability problem, not just an exchange-rate problem. In a world of uneven rate paths and periodic volatility spikes, the most informative signal isn't the dollar's level — it's how expensive it is for a company to keep earnings predictable. | | Sources | Board of Governors of the Federal Reserve System (US) via FRED, January 2026 https://fred.stlouisfed.org/series/DFEDTARU | Board of Governors of the Federal Reserve System (US) via FRED, January 2026 https://fred.stlouisfed.org/series/DTWEXBGS | Bank for International Settlements, December 2025 https://www.bis.org/publ/qtrpdf/r_qt2512b.htm | Bank for International Settlements, September 2025 https://www.bis.org/statistics/rpfx25.htm | YCharts, January 2026 https://ycharts.com/indices/%5EEVZ/level | | |
|
Tidak ada komentar:
Posting Komentar