Forex realignment

Many company treasury departments were slow to respond to rising volatility in the foreign exchange market, along with a shift in the direction of the US dollar last year. Are corporates changing their hedging policies in response? By Peter Madigan

Turmoil in foreign exchange markets has been largely kept off the front page over the past year by the unprecedented credit drought, unheard-of volatility in equity markets and the slashing of interest rates by central banks across the globe.

While headlines focused on the demise of Lehman Brothers, foreign exchange appeared to fall out of the public consciousness, deemed a shaken market but one that had not experienced the same degree of trauma as the credit and equity sectors. This reading was