Corporates step up FX risk management amid global uncertainty

New research has found that more than four in five corporates are actively hedging their foreign exchange (FX) exposure as finance leaders respond to mounting geopolitical tensions and increased currency volatility. The findings come from the MillTechFX Global FX Report 2025, which surveyed 750 finance professionals across Europe, the UK and North America. The report highlights a shift towards longer and more structured hedging strategies despite rising costs and operational challenges.

Across the UK and Europe, 60% of corporates say they plan to extend hedge lengths. Only a small minority, around 10%, intend to reduce them. At the same time, one-third of firms are decreasing hedge ratios, indicating a balance between long-term protection and short-term flexibility. The average hedge ratio stood at 48% globally. North America and Europe reported 49%, while UK firms averaged slightly lower at 45%.

Hedge tenors were also broadly aligned. The overall average was 5.3 months. The UK came in slightly higher at 5.5 months, followed by Europe at 5.3 months and North America at 5 months. These adjustments are taking place despite increased costs. According to the research, 80% of corporates have experienced higher hedging expenses over the past year. The pressure is most acute in Europe, where 98% reported cost increases, compared with 70% in the UK and 73% in North America.

Exposure to unhedged risk has had a clear impact. Three-quarters of firms reported losses due to unhedged FX exposure. US corporates were most affected, with 76% reporting losses, followed by the UK at 75% and Europe at 72%. In response, more than half of firms say they are now considering hedging. UK corporates showed the strongest interest, with 68% weighing their options, compared with just 36% in Europe.

The report highlights the role of domestic currency performance in business outcomes. Overall, 88% of corporates said FX movements had affected their bottom line. This rose to 93% in North America, while 88% of European respondents and 83% of UK firms reported a similar impact. Regional trends reveal that Europe leads in FX hedging adoption, with 86% of businesses using hedging strategies. North America follows at 82%, while 76% of UK corporates reported using similar tools.

The study also captured corporate sentiment on Donald Trump's return to the US presidency. Overall, 78% of respondents expressed optimism about the possible impact. European firms were most confident, at 84%, followed by the UK at 81%. North American firms were more cautious, with 70% expressing optimism, possibly due to concerns about the strength of the US dollar. In the UK, access to credit has emerged as a concern. Nearly three-quarters of corporates said they had been affected by tightened criteria, while 79% reported rising fees. These issues are also present in Europe, though to a lesser extent, with 70% reporting tighter credit conditions and 68% citing increased costs.

Operationally, many corporates continue to rely on manual processes for FX transactions. Phone calls remain the most common method, used by 34% of firms, followed by email (32%) and file uploads (30%). However, signs of digital transformation are emerging. All firms surveyed said they are exploring the use of artificial intelligence. The most popular applications include risk management (45%), FX operations (41%) and process automation (40%).

Looking ahead, corporates identified automation tools as the technology most likely to transform their business in the next five years. This reflects a growing focus on digitising financial operations and improving risk management through modern infrastructure.

 

US weighted average tariff rate exceeds Goldman Sachs’ expectations 

The “reciprocal” tariff policy President Trump announced last week would impose a weighted average tariff rate of 18.3% on US trade partners, according to Goldman Sachs Research (GSR). This is around three percentage points higher than GSR had expected. Roughly one-third of total imports would be exempt, which reduces the impact to a 12.6 percentage point increase in the effective tariff rate.

GSR researchers estimate that this and other tariffs announced year-to-date would raise the US effective tariff rate by 18.8 percentage points, according to a report dated April 2 by Alec Phillips, chief US political economist at Goldman Sachs Research, and economist Elsie Peng. They assume that negotiations with trading partners will lead to somewhat lower “reciprocal” rates than announced this week. However, the prospect for escalation following retaliatory tariffs and a high probability of further sectoral tariffs suggest the US effective tariff rate could rise more than the 15 percentage points GSR economists had previously expected.

Tariffs affect economic growth through their tax-like impact on real disposable income and consumer spending; their tendency to unnerve markets and tighten financial conditions; the impact of uncertainty about trade policy on business investment; and the modest offsetting effect of a narrower trade deficit, according to GSR. While the personal and corporate tax changes that Congress is likely to pass will modestly boost growth, fiscal policy is unlikely to offset the hit from tariffs and immigration this year.

When it comes to inflation, the team’s rule of thumb is that every one percentage point increase in the effective tariff rate raises core PCE prices by about 0.1 percentage point.

 

All global service sectors signal growth in March

Latest data from the S&P Global Sector PMI shows twice as many sectors in expansion territory (14) than in contraction (7). Looking at the two broad sectors, weakness seeped further into the goods-producing sector in March, while in contrast, all service sectors recorded a pick-up in activity. Although there was widespread optimism towards the future, notably, only around half of the sectors expanded their workforce numbers at the end of the first quarter of 2025.

Insurance led in terms of activity in March, taking the top spot for the fourth time in the past six months. The rate of growth was substantial and its strongest since November 2024. Other Financials - which includes consumer financial services, specialty financials and investment services - followed closely behind. The autos sector meanwhile placed last in terms of output, new orders and second-last on the jobs front (only just ahead of Healthcare Services).

Employment trends at the sector level were closely aligned with that of activity, as those registering an increase in output generally added to their workforces, and vice versa. The broader Financials sector led in terms of jobs growth, having signalled solid expansions across three of the four components, excluding only Real Estate where the increase was modest nonetheless. The rates of job creation across all Financials sectors were also elevated by historical standards.

Although all 21 sectors signalled a rise in operating expenses in March, 11 saw cost pressures cool on the month. Input cost inflation was strongest for Tourism & Recreation, where the rate was steep and its most marked for ten months. At the other end of the scale, Metals & Mining saw the weakest cost pressures of the 21 monitored sectors and subsequently reduced their output charges. The only other sector to cut fees in March was Banks, where the trend of discounting was stretched to an eighth successive month, albeit only slight in nature.

 

ION introduces centralised platform to streamline corporate payment processes

ION Treasury has launched a solution designed to help businesses centralise, automate and secure their payment operations. ION’s Enterprise Payment Hub is intended to support corporates with complex payment environments by consolidating workflows across multiple systems and banking connections.

According to ION, many firms struggle with fragmented processes and limited end-to-end visibility across their payments landscape. The platform aims to address these challenges by bringing all payment activities onto a single, system-controlled infrastructure. Features include encryption, workflow consistency, reliable connectivity, and tools to manage cut-off times and monitor transactions in real-time.

The system is intended to integrate with a wide range of upstream payment sources, including treasury management systems, enterprise resource planning platforms and custom in-house systems. It offers deployment flexibility, supporting both cloud-based and on-premises environments.

A focus of the platform is to improve transparency across the full payment lifecycle. Using API connectivity and support for the Swift GPI standard, users are able to track global payments in real time and receive alerts when interventions are needed. The solution is designed to support straight-through processing for various payment types, while maintaining compliance with internal control frameworks.

For finance teams, the platform is positioned as a way to support broader digital transformation objectives. By consolidating data in one place, it can serve as a foundation for artificial intelligence applications and cost-reduction strategies. ION says this approach may help corporates optimise liquidity management and reduce bank-related fees while also improving fraud prevention and governance.

The platform is built to operate alongside existing systems and does not require full system customisation. It supports configurable workflows and integrates with ION Treasury’s broader suite of tools, including its treasury management systems.

 

China issues first sovereign green bonds

The Ministry of Finance of the People’s Republic of China has launched its first-ever sovereign green bond issuance, raising RMB6bn through three-year and five-year maturities. The bonds have been admitted to trading on the London Stock Exchange’s International Securities Market.

This is the first time China has issued sovereign green bonds under a dedicated framework. The People’s Republic of China Sovereign Green Bond Framework, released in February 2025, sets the foundation for international green bond issuance by the Ministry of Finance. The framework has received assessments from both Chinese and international second-party opinion providers and aligns with domestic and global green bond standards, including the China Green Bond Principles (2022) and the Green Bond Principles published by the International Capital Markets Association.

The issuance is intended to support China’s wider climate and sustainability agenda. In 2020, China pledged to peak carbon emissions by 2030 and reach carbon neutrality by 2060. These goals are part of a broader policy approach that integrates environmental priorities into national development plans. Since 2013, ecological sustainability has featured prominently in China’s Five-Sphere Integrated Plan, which outlines objectives across economic, political, cultural, social and environmental spheres.

According to the Ministry of Finance, the sovereign green bond framework is intended to encourage more domestic issuers to participate in international green markets and to broaden the investor base for Chinese green assets. It is also seen as a step towards the continued internationalisation of the renminbi.

The proceeds from the issuance are expected to be allocated to projects that align with the environmental objectives outlined in the framework. These could include initiatives in clean energy, low-carbon transport, pollution control and biodiversity protection, although specific project allocations have not yet been disclosed.

The green bonds were placed with the support of a consortium of international and Chinese financial institutions. The joint lead managers and joint bookrunners for the transaction were Bank of China, Bank of Communications, Barclays, China International Capital Corporation, Crédit Agricole CIB, HSBC, ICBC and Standard Chartered Bank. Crédit Agricole CIB and Bank of China acted as green structuring advisors for the deal.

 

Calastone launches tokenised distribution service for investment funds

Calastone has launched a tokenised distribution solution that allows asset managers to offer fund shares directly to blockchain-native investors without requiring changes to how those funds are structured or administered. The service is intended to provide a simplified entry point into tokenisation, enabling access to new digital investor segments through blockchain networks such as Ethereum, Polygon and Canton.

By embedding tokenised fund shares into these ecosystems, asset managers can reach a growing set of investors who operate exclusively within blockchain infrastructure. These include corporate treasurers managing on-chain cash balances, stablecoin issuers and institutional crypto firms seeking regulated investment options without converting into fiat currencies, and retail or wealth investors accustomed to using digital wallets for asset management.

The solution is integrated with Calastone’s existing global network, which connects over 4,500 firms across 56 markets. It allows any fund share class already on the network to be tokenised and distributed via public, hybrid or private blockchain channels. Orders initiated on-chain are automatically translated and processed through Calastone’s infrastructure, maintaining full compatibility with traditional operational workflows.

According to Calastone, the aim is to reduce distribution costs through automation while enabling asset managers to maintain current service provider relationships. The model is designed to bridge the gap between traditional investment funds and digital asset environments, allowing firms to access new pools of capital without significant operational disruption.

The system works by converting eligible fund shares into smart contract-powered tokens. These digital tokens incorporate fund details, follow embedded security protocols, and automatically mint or burn in response to subscriptions and redemptions, reflecting real-time investor activity on blockchain platforms.

 

Ripple expands payments offering with stablecoin integration

Ripple has integrated a US dollar-backed stablecoin into its global payments infrastructure in a move intended to support growing enterprise demand for faster and more cost-effective cross-border transactions. The stablecoin, Ripple USD (RLUSD), has now been incorporated into Ripple’s main payments solution, which is used to process high-volume cross-border flows for institutional clients. According to Ripple, the integration is aimed at improving payment speed and reducing costs, while offering a stable, compliance-focused asset for use in enterprise treasury operations.

RLUSD was launched in December 2024 and has since reached a market capitalisation of nearly US$250 million, with reported trading volumes of US$10 billion. While many stablecoins are designed for retail transactions, Ripple says RLUSD is structured to meet the requirements of global financial institutions, with a focus on transparency, regulatory alignment and scalability.

Ripple’s cross-border payments platform combines API-driven connectivity, an established payout network, and integration with digital assets to support international treasury flows. The addition of RLUSD offers corporate users a new settlement option that aligns with existing operational and regulatory frameworks.

The asset is already being used by selected clients within Ripple’s payments ecosystem, including cross-border payment providers BKK Forex and iSend. Ripple says these early applications are helping firms streamline treasury operations and improve liquidity management across jurisdictions. Wider availability of RLUSD within Ripple’s platform is expected over time.

 

Yavrio expands US connectivity and launches embedded payments

Open banking fintech Yavrio has announced direct connectivity to corporate accounts at five of the largest US banks: Wells Fargo, J.P. Morgan, Citi, Bank of America and U.S. Bank. The announcement comes as the company continues its international expansion.

Yavrio has also launched embedded ACH, RTP, FedNow and wire payment capabilities, now available across more than 9,600 US banks. The service enables businesses to send funds directly from their payment journals to vendors via their bank accounts, aiming to improve efficiency, visibility and security in corporate finance operations.

The fintech’s platform integrates directly with corporate banking systems, providing real-time data access and streamlining payments through multiple rails. The offering is positioned as a solution for finance teams seeking to modernise banking processes and reduce reliance on manual downloads and reconciliations.

Momentum for open banking in the US has grown since the Consumer Financial Protection Bureau finalised the Personal Financial Data Rights rule in late 2024. As access to financial data improves, Yavrio says it is helping organisations consolidate accounts into unified systems that support automation and control.

 

Swedbank upped sustainable financing volumes in 2024

Swedbank significantly grew sustainable financing volumes last year, according to its Sustainable Bond Impact Report 2024. The bank’s Sustainable Asset Register – comprised of green and social assets – amounted to SEK128bn by year-end 2024, an increase of 73% compared to 2023.

“The substantial growth in the Sustainable Asset Register demonstrates both Swedbank’s and our customers' strong commitment to advancing the sustainability transition,” commented Johanna Fager Wettergren, Head of Sustainability at Swedbank. “Our commitment is steadfast. Now is the time for acceleration.”

A driver of this expansion is the increase in the Green Buildings category. Swedbank actively supports its property sector customers with tailored advice and products focused on energy efficiency. The bank also continued to support the expansion of renewable energy and the energy transition within the Baltic home markets, which has led to a significant increase in the category. The bank's share of financing in renewable energy is estimated to contribute to more than 2,500 GWh of renewable energy annually.

“The transition to renewable energy sources with low carbon emissions is key to achieving the Paris Agreement,” added Wettergren. “The shift is especially important in our Baltic home markets, where Swedbank’s Register show significant growth in renewable energy.”

 

Visa and Zen expand cross-border payment partnership

Visa has extended its partnership with European fintech Zen.com (Zen) to enhance cross-border payment capabilities through Visa Direct. The agreement will enable Zen to facilitate real-time international transactions across peer-to-peer, business-to-consumer and business-to-business use cases.

Zen has worked with Currencycloud, now part of Visa Direct, since 2020 and began using Visa Direct for card payouts in 2023. The latest phase of the partnership aims to support faster and more secure global payment flows by integrating Visa Direct’s real-time infrastructure into Zen’s existing services.

The fintech currently provides users with multi-currency IBAN accounts, fast transfer options, and payment tools for both retail and business users. By expanding its use of Visa Direct, Zen is looking to improve the speed and reach of its cross-border services while maintaining compliance and efficiency in international money movement.