Hedge Foreign Exchange Risk in HKD - Hong Kong Dollar
Foreign Exchange Risk in Hong Kong Dollar (HKD)
When conducting transactions with Hong Kong, you may need to send or receive payments in Hong Kong Dollar. You are then naturally exposed to foreign exchange risk. Indeed, between the time you invoice your client in HKD and the time you collect the HKD or conversely between the time your supplier issues their invoice in HKD and you settle this invoice in HKD, the EUR/HKD rate may have moved in your favor or against you. It is to eliminate or minimize this risk of EUR/HKD rate movement (assuming your accounting currency is EUR) over a determined period that you can implement hedges on the EUR/HKD. By locking in the EUR/HKD rate in advance, you gain better visibility on your future cash flows in Hong Kong Dollar (HKD) and secure your EUR/HKD budget rate.
Foreign Exchange Risk Hedging on Hong Kong Dollar (HKD) with Mondial Change
Mondial Change allows you to hedge your foreign exchange risk on the Hong Kong Dollar (HKD). The foreign exchange risk hedging on the Hong Kong Dollar can be done through fixed forward contracts or flexible forward contracts. It is also possible to hedge the exchange risk on the HKD using currency options. You can use our hedging assistance tool which will help you select the most suitable hedging strategy for your needs. You can also schedule a meeting with our trading desk. An expert market advisor will assist you in setting up your foreign exchange hedges on the Hong Kong Dollar (HKD).
Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Hong Kong Dollar (HKD) Operations
Are there minimum or maximum amounts to set up hedges in Hong Kong Dollar (HKD)?
The maximum amount of hedges in Hong Kong Dollar (HKD) you can validate primarily depends on the size of the forward exchange line granted to you. The line conditions granted depend on the review of your financial statements. Regarding minimum sizes, we generally do not take hedges for amounts below 10,000 EUR (or equivalent in other currencies).
What is the maximum possible maturity for hedges in Hong Kong Dollar (HKD)?
Generally, we do not offer hedges in Hong Kong Dollar (HKD) for maturities exceeding 24 months, but this can be considered on a case-by-case basis. Please contact our trading desk for a personalized assessment of your needs.
What are the setup fees for hedges against foreign exchange risk in Hong Kong Dollar (HKD)?
All fees related to setting up hedges in Hong Kong Dollar (HKD) are included in the exchange rate communicated to you before the validation of your transaction. The hedging is done by phone with a trading desk operator. No fees are applied to the use of your hedges.
Is a security deposit required to take a hedge in Hong Kong Dollar (HKD)?
Again, this depends on the conditions of your forward exchange line. Thanks to its network of partners, Mondial Change generally manages to obtain forward exchange lines without an initial security deposit. Depending on your line conditions, margin calls may be triggered on your Hong Kong Dollar (HKD) hedging contracts if the EUR/HKD rate (or any other pair on which you have validated a hedge) deteriorates beyond the variation margin or beyond your OTM. In this case, you must deposit funds as collateral to keep your Hong Kong Dollar (HKD) contracts open. Based on the review of your financial statements, lines without margin calls can sometimes be granted.
Are there minimum amounts for early drawdowns on flexible forward contracts in Hong Kong Dollar (HKD)?
No minimum amount for drawdowns on your flexible forward contracts in Hong Kong Dollar (HKD). You can draw down autonomously on the online platform as many times as you wish between the contract initiation and the maturity date of your forward contract in Hong Kong Dollar (HKD).
What happens at the maturity of my forward contract in Hong Kong Dollar (HKD) if I have not used the entirety of my contract?
In this case, there are two possibilities. You can sell the balance of your contract by paying the potential exchange loss if the exchange rate at the time of resale is less favorable than your contract rate. Alternatively, you can ask Mondial Change to extend your Hong Kong Dollar (HKD) contract by a few months to give you time to use it. However, Mondial Change and its partners reserve the right not to accept extending the contract's maturity date.
What is the current interest rate on the Hong Kong Dollar (HKD)?
The current interest rate on the Hong Kong Dollar (HKD) is "Currency Rate".
Are there carry points or discount points on forward contracts in Hong Kong Dollar (HKD)?
It all depends on whether you are a buyer or seller of Hong Kong Dollar (HKD) and against which currency you are trading the Hong Kong Dollar. For example, against the euro: If you are a buyer of Hong Kong Dollar (HKD) against the EUR, then there are report points because the interest rate of the Hong Kong Dollar (HKD) is supérieur to that of the EUR. Conversely, if you are a seller of Hong Kong Dollar (HKD) against the EUR, then there are déport points.