Mitigating Inflation, Recession, and Risk: Key FX Hedging Considerations

In this podcast, we speak with Edward Kim, Regional Director of Currency Risk Management Solutions at Corpay Cross-Border. We address what’s happening in the economy: why currencies move; and how a tailored hedging strategy can help mitigate currency risks. Ed touches on the topic of recession and inflation in relation to similar past events, market trends, and current challenges; and the factors that might increase currency volatility. He also highlights important considerations when managing FX exposure during a recession or downturn, and the elements of a flexible and diverse strategy that help mitigate risk in any economic climate.

Timestamps

• 0:20 – Let's talk about the what, the why and the how. Do you think we are in a recession or entering into a recession? What exactly is a recession?

• 3:20 – What is inflation and what causes it? Why is it bad? For example, inflation might be considered more of a monetary policy rather than a fiscal problem.

• 8:44 – What sorts of factors are typically associated with currencies, either strengthening or weakening against other currencies?

• 13:27 – How do higher interest rates typically affect the currency market in general?

• 17:15 – Why has the USD often gained against other currencies when the stock market was going down, and vice versa?

• 21:50 – What typically causes volatility?

• 26:24 – What has caused the recession in your opinion, if indeed we are in a recession?

• 30:34 – What are some specific considerations when managing FX exposure during a recession?