31 Dec 2018 05:07 PM

What is Foreign Exchange risk?

Forex markets are extremely unpredictable and insanely volatile necessitating regular monitoring of the forex markets to manage forex risk. Exposure to abrupt changes in the exchange rate between two currencies opens up vulnerabilities to foreign exchange risks resulting in either direct or indirect loss to an organization. The adverse effects of foreign exchange risks extend beyond organizations. Investors who trade in international markets, and businesses engaged in the import/export products or services to multiple countries also encounter forex risks wherein any appreciation and depreciation of the base currency will affect the cash flows emerging from the transaction. There is no centralized market for trading currency in the forex exchange market, which gives rise to high volatility while witnessing participation from larger corporations, government bodies, MSMEs, individual traders and investors. Fluctuations in exchange rates are influenced by any variation in the economic and political conditions, which further foster unpredictability and breed the need for forex advisory to mitigate risks. An organization can incur substantial direct and indirect losses with their cash flow, assets, profits adversely affected and experiencing travail in financing future operations due to unexpected movements in foreign exchange rates.  

Depending upon the risk appetite and the industry in which they operate, companies can have different outlooks towards risk mitigation with some employing pretty stringent measures while others being lax. Whatever might be the case, the primary step that will entail the Forex risk management of any organization is a robust forecasting system and a solid understanding of the foreign exchange measure. The tools available to actively mitigate foreign exchange exposure include both simple and low cost to more complex and expensive. Transacting in your own currency can be one method applicable for companies with resounding brand identity; however, the practicality of this measure turns questionable when considering certain costs payable in only local currency. Building protection into commercial contracts through specific clauses can be another method that provides security against exchange rates that deviate more than an agreed amount but can lead to tough commercial discussions with the customers that many might want to avoid. A well-known way of hedging foreign currency risk is through the use of hedging arrangements via financial instruments. The two primary methods of hedging are through a forward contract or a currency option.

Need for Forex Advisory Services

Various factors influence the forex market daily, and tackling them can comprise a time-consuming process that might divert a company's attention from their operations necessary for business sustenance and expansion to risk mitigation. Foreign exchange risk is faced by various organizations worldwide when carrying out business tasks or to a smaller level during money transfer to any client/organization. Forex risk management is not a straightforward process but requires the appropriate knowledge of the exposure risks an organization might encounter along with having a forecasting system in place. Having a forex advisor enables you to devote more time and attention to your business development and allows the experts experienced in the field to devise strategies beneficial for your firm. Assistance on existing hedges along with independent hedging advice, risk management training, fundamental and technical outlook reports, advisory on meeting corporate objectives, continuous attention with an advisor dedicated to a particular firm, drafting customized forex hedging plan, and checking the rates encompass the services provided by forex firms that simplify your forex transactions while being time efficient for you and your business.

Myforexeye- Forex Advisory Strategies:

The forex risk advisory service of Myforexeye establishes its credibility and efficaciousness through the implementation of an approach centred around protecting business budgets and managing risks rather than speculating on forex. Myforexeye provides Forex Risk Advisory service under the name Dr. Forex, a forex risk-mitigating process for a specific forex transaction. We offer customized forex research reports in response to specific queries on forex risk management/market followed by an explanatory phone or skype call. The added features that ensure customer convenience is the no monthly/yearly retainer approach but availing the Transaction Forex Risk Advisory service as per the user needs. Myforexeye risk advisory services encompass customized solutions geared towards resolving the type and amount of risk our customers face in foreign exchange markets by leveraging technology and financier relationships. The specialized services of Myforexeye include corporate forex, and retail forex helps in tackling the foreign exchange risk. Myforexeye being your risk advisory service, our role and responsibility will consist of monitoring and controlling your company's forex portfolio and managing your transactions. We will be ensuring that your company gets enlightened about the prevailing true and market aligned conversion prices for optional contracts and forward/spot/cash. For entry-level, we provide advice on stop levels (in conjunction with benchmark cost) utilizing relevant instruments and structures aimed at controlling the currency risk. Our risk advisory service's function is to minimize financial cost as much as possible while being transparent in our processes wherein our specialized team has decades of experience in forex risk management. Along with the guidance that we provide to our clients, our services also enable individuals to set custom alerts to remain timely informed of the forex market trends. Our risk management strategies consider our clients' risk appetite and their long-term goals before our team drafts a customized corporate risk policy advice upon technical analysis (price charting) and fundamental analysis. 


Myforexeye is India’s first full-service forex service provider meeting all the forex needs of organizations irrespective of their scale and individual forex enthusiasts wherein our services discharged are powered by advanced technology, armed with the expertise of experienced professionals and executed by our specialized team. Our user-friendly platforms- web portal and mobile app encourage actualization of our objective of providing a transparent streamlined process which meets the forex demands of users in a convenient manner eliminating the aspect of hidden commissions. Our consultants help users maneuver challenges and risks associated with the forex market and render strategies and techniques to mitigate them. Enabled by our lack of obscurity, our services empower users to make savings corroborated by our platform that provides an insight into real-time rates and best quotations from banks to equip you with the best possible options. 

Speak to one of our specialists to acquire a detailed understanding of Myforexeye forex services.

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