Hedge FAQs

For a business operating internationally, currency risk hits your bottom line when exchange rates fluctuate between the time you set your annual budgets—or price your products—and the moment you actually pay a supplier or receive funds. If the market moves the wrong way at that time, your profit margins can disappear.

You're a UK business wanting to buy $100,000 of goods from a US supplier in three months' time. Today, £1 buys $1.35, so the order would cost about £74,074. If the pound weakens to $1.30 by the time you pay, it would cost you about £76,923, roughly £2,849 more, for the exact same goods. That swing comes directly off the bottom line.

Left unmanaged, FX exposure makes profits unstable and unpredictable. The same product or contract can be profitable one month and loss-making the next, even though your business remains unchanged.

In a word: instability. FX movements can quietly erode your profits and make it harder to run your business.​

Pricing customers can be difficult because you don't know what your costs will be in your home currency. Build in a big buffer, and you risk losing the deal; price it tight, and you risk losing money.​

Forecasting and budgeting often become less reliable because next quarter’s supplier bill is a moving target. Your P&L can depend more on FX rates than on your business's actual performance. This makes cash flow planning harder and forces you to react instead of plan ahead.

Hedging helps you keep your profits steady and gives you peace of mind. It lets you lock in prices in advance and budget more accurately. This way, you can focus on running your business instead of worrying about the market.

A forward contract locks in today's exchange rate for a payment or receipt in the future. It turns an unknown future cost into a known, fixed cost.

​Quick example: You'll pay $100,000 to a US supplier in three months. With a forward, you fix the rate today at £1 = $1.35, so in three months, that $100,000 will cost you exactly £74,074, no matter what the market does in between.

With Ebury, you can choose from a wide range of product suites*, including fixed forwards, window forwards, and dynamic forwards, so you can select the product that best fits your cash flows. You can also book non-deliverable forwards for emerging market currencies that can't be physically delivered.

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*Note: The provision of some FX Products, such as NDFs and Dynamic Forwards, is restricted to certain jurisdictions. Please contact us to learn more about the products available in your country.

Protect your profit margins from currency swings without draining your cash flow. Our deposit-free facilities allow you to hedge your FX exposure while keeping your working capital untouched. Because every business is unique, our credit risk analysts and your dedicated relationship manager will work together to determine a bespoke facility tailored exactly to your needs.

In forward contracts, because the rate is predetermined, you will forgo any benefit from favourable FX movements between the trade date and the maturity date. Cancellations or amendments may incur additional costs. If the spot market moves unfavourably, Ebury may make a Margin Call to cover the out-of-the-money position.

At Ebury, you can set up a forward contract for 1 week to 10 years, depending on the currency and product you choose.

Yes, with a forward contract, purchasing the currency is a binding obligation.

You can, but most banks aren't set up to proactively support SMEs with cross-border trade solutions designed for them. Their FX desks are built for big corporates or basic personal FX, where you’ll typically experience minimal dedicated support, wider spreads and a narrow product range.

​At Ebury, we offer proactive, personalised and tailored solutions designed around the needs and goals of international SMEs. Plus, you get access to a dedicated relationship manager who learns your business, supplier flows, sales cycles, and busy and quiet months.

In short, we help you access flexible solutions that go beyond the trade — business accounts, hedging, software integrations, and operational support to simplify your international business.

The Ebury Hedge platform is a central hub to monitor your entire FX portfolio.

You can see your exposures, trades, hedging policies, performance, and credit conditions, and easily review and approve trade instructions.

Using this portal, you can also compare exposures vs hedges in real time, manage contracts, and download statements to identify areas for improvement, and determine where action is needed.

At Ebury, you decide how you wish to trade. You can use the Ebury Hedge platform to book trades and manage contracts. Or get in touch with your dedicated relationship manager, who will design a tailored hedging strategy for your business after understanding your needs, the currencies involved, risk tolerance, and goals. They will also guide you through the contract’s terms and conditions.

In addition, we regularly visit our customers' offices and speak by phone or via video. We can also speak with your suppliers to explore how we can secure more favourable pricing in local currencies.

With almost 16 years of supporting international businesses, we know your challenges and how to navigate them. We help you unlock your global ambitions while taking the operational hassle of cross-border trade off your plate.

We bring together everything you need to trade and scale globally with ease: bespoke solutions, a centralised platform, and a dedicated team worldwide to help you realise your business aspirations.

We are backed by the world’s prestigious investors, including Banco Santander, and regulated by the Financial Conduct Authority in the UK, with licences in 20+ markets.