A recent survey conducted by software provider MillTechFX revealed that two-thirds of companies worldwide are considering adjusting their currency hedges due to increasing geopolitical tensions. The survey, which targeted 750 senior corporate finance officers in Europe, the United States, and the United Kingdom, highlighted that 62% of respondents plan to extend the length of their hedges or increase the proportion of currency exposure that they hedge this year.

The heightened volatility in currency markets, influenced by factors such as tariffs, geopolitical tensions, and varying economic policies, has driven companies to protect themselves using derivatives. The survey emphasized that while 81% of companies currently hedge their currency exposure, three-quarters of those that do not have suffered losses from unhedged currency risk.

The survey also indicated that the escalating costs of hedging currency exposure deter some companies, with 50% of respondents expressing reluctance to hedge due to expenses. However, there is a growing trend among previously unhedged companies, with 52% now considering implementing hedging strategies.

Overall, the survey underscored the challenges faced by companies in managing currency exposure amidst market uncertainties. It also highlighted the impact of currency fluctuations on different regions, with UK corporates experiencing negative effects from a strong pound, while European corporates were less affected by euro volatility compared to their counterparts.