Dollar distress
Scottish Power has announced a £400 million cash windfall through its currencyhedging programme. Others have not been so lucky – but everyone is nowwaking up to currency trading. By James Ockenden
Hedging currency risk is the exception rather than the rule in the UK – indeed, according to Tony Wilson, director of corporate foreign exchange for global currency trader Travelex, only 5% of UK corporates hedge these risks. But for Scottish Power, a regulated utility with a $6 billion US subsidiary whose shareholders are used to low earnings volatility, covering its exposure to foreign exchange rates is an absolute necessity.
Its risk strategy was developed in 2000, shortly after
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