A key aspect of corporate pricing strategy is forecasting future exchange rates. Aside from using banks to help them do this, the internal models corporations use are typically one or more of the following kinds: Political event analysis Fundamental Technical For the reasons we have mentioned earlie[...]
Archive for the ‘Exchange risk’ Category
July 3rd, 2009 - 9:07 pm § in Exchange risk
BUDGET RATES
The setting of budget rates is crucially important for a corporation as it can drive not only the corporation’s hedging but also its pricing strategy as well. Budget exchange rates can be set in several ways. The benchmark or budget rate for an investment in a foreign subsidiary should normally be[...]