The latest FiREapps survey showed that currency swings are still costing US companies big time. They estimate that U.S. businesses lost more than $4bn due to FX swings last quarter.  Some 233 U.S. companies said currency swings hit their revenue and earnings in Q2, according to an analysis of conference calls by FiREapps.

Apparently, some companies have taken steps to try to protect themselves. After an earnings hit from foreign exchange in the second quarter, one company said it was adding $10 million to their restructuring actions to offset such impacts. Nevertheless, despite hedging efforts, many companies still face a higher level of currency volatility than they’re used to, according to FiREapps’ Mr. Koester

Emerging market currencies
Today the Financial Times reports that MNCs are buying more hedges to protect against swings in the emerging market currencies. Citigroup said its business with companies hedging exchange rate risk in emerging markets has risen 12-13% since last June when the sell-off in these currencies gathered pace.

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It is systems like FiREapps FX solutions that track the real exposures hidden in the actual entries in the A/R and A/P ERP systems are becoming essential. Company boards of directors are becoming much more clued into the impact of currency flows, and are now asking very specific questions about the impact on the balance sheet. Could you answer such questions with confidence? If not, why not?