Managers turn to forex experts as rate changes evolve

Date: Monday, November 22, 2010
Author: Emily Perryman, HedgeWeek

The ongoing “competitive devaluation” in the foreign currency market has seen forex trading continue to thrive as funds seek to mitigate their risk and capitalise on ever evolving rate changes.

The foreign exchange market has seen a 20 per cent growth compared to two years previous and a recent report by the Bank for International Settlements estimates trading has now reached over USD4trn every day.

Corporate Currency Exchange Network director Nathan Bullas says: “We have seen a huge surge of interest from our corporate partners. Increased currency volatility has pushed treasury teams to focus on their portfolios and no longer view forex as simply an administrative or banking function.”

Part of CCEN’s service is to continually monitor live cash positions across funds and prevent any debit positions occurring. This service can often be established without the need to move funds from custodian bank.

Bullas says: “We act by monitoring fund accounts and any debit positions are dealt with instantly. This type of focus has helped reduce debit interest charges and therefore enhanced our partners fund performance.

“Even if we are not trading the forex, we can ensure the custodian banks are looking after their client by offering the best rates possible at any given time.”

Derek Chambers, chairman and chief executive of SFM Group International, adds: “The comprehensive nature of their advisory service focuses exclusively on forex strategies, treasury management and related financial functions. Implementing a successful strategy results in substantial savings and improved cash management efficiency for all our fund managers of the 18 sub funds, which total over USD250m AUM.”