International Business - FX

Hedging currency risks with foreign exchange transactions

Whoever conducts business internationally is exposed to the risk of exchange rate fluctuations. Exchange rate fluctuations can reduce the margin from the operating business and have a significant impact on the business result.

Your benefits

Currency hedging protects your company against major fluctuations in exchange rates. This increases planning certainty and allows you to focus more on your core business. Proper currency management is likely to remain a key issue for Swiss companies in the future. The reason for this is that the volatility of the financial markets and political and geopolitical uncertainties will continue to require consistent hedging.

Our solutions for your foreign exchange transactions

On-site consultation

Would you like a personal consultation regarding foreign exchange transactions and currency hedging? Our experts in the five regional foreign exchange centers will be happy to assist you.

Basic transactions

Basic transactions include spot and forward transactions, swap transactions and limit orders. The prerequisites for the conclusion of a spot transaction are an account held at Credit Suisse, relevant foreign currency accounts and the required credit balance.

With the help of a spot transaction, one currency can be immediately converted to another. The contract concluded is irrevocable and must be performed. In spot transactions, the delivery of the converted foreign exchange usually takes place two banking days after the conclusion of the transaction.

 

Alternatively, it is possible to trade on a different maturity. A specific date in the future is in this case agreed as the settlement date. This is a forward transaction, as the interest rate difference is taken into account.

A swap transaction combines a spot transaction and an offsetting forward transaction. Such transactions are used to manage cash holdings via different currency accounts or to change the value date of an existing forward transaction.

A limit order allows clients to specify the rate at which they wish to conclude a foreign exchange transaction. Credit Suisse will then monitor the order and execute the transaction as soon as the desired rate is reached.

Can I also enter into a transaction with a same-day value date?

Yes, this is possible taking into account the difference in interest rates. During office hours (from 7:00 a.m. to 6:00 p.m), you can cover account balances with a same-day value date. Under normal circumstances, these transactions show on the account immediately.

 

Is the same exchange rate always applied?

No, Credit Suisse has different amount categories.

 

What can I do if I have a temporary shortfall in one currency but have sufficient liquidity in another currency?

With a foreign currency swap (combination of a spot transaction and a forward transaction) you can manage your liquidity efficiently.

 

Can I place my currency conversion at a desired rate at Credit Suisse?

Yes, for amounts of CHF 250,000 or more, we can monitor limited orders for you. Alternatively, you can also enter a call level, in which case we will inform you during our office hours (from 7:00 a.m. to 6:00 p.m) as soon as the desired rate has been reached.

 

Why are banknote rates worse than foreign exchange rates?

The purchase and sale of notes always requires a lot of manual work. Notes must be obtained from or returned to the country of origin, which incurs costs for transport and insurance. These amounts are disproportionately significant, particularly in the case of small amounts. Moreover, banknotes do not generate interest.

Dual currency investments

Dual currency investments combine a time deposit with a currency option strategy. This provides a higher return than standard money market investments. In return, clients face the risk of receiving the repayment at the end of the term in an alternative currency, depending on the development of the underlying foreign currency.

 

All dual currency investments can be tailored to your needs. We offer both securitized and unsecuritized OTC solutions.

Hedging strategies

Hedging strategies can help protect your company against daily currency fluctuations and thus increase planning certainty. In order to cover your individual needs in the best possible way, several options can be combined in a targeted way. In addition to an extensive range of basic hedging instruments such as risk reversals or participating forwards, various advanced hedging and outperformance strategies are also available.

 

In most cases, the objective is to optimize the hedging rate or hedging costs. Based on your risk appetite and risk profile, our specialists willcompile the appropriate hedging strategy for you.

Basic hedging

Advanced hedging

Outperformance strategies

Foreign exchange centers in your region

We are always pleased to assist you and look forward to meeting you personally. More than 25 specialists are at your disposal in our foreign exchange centers in Basel, Geneva, Lugano, St. Gallen and Zurich.

Credit Suisse
FX Sales Switzerland
St. Albangraben 1–3
P.O. Box 2560
CH-4002 Basel


Phone: +41 61 279 65 00*
Fax: +41 61 279 66 03

Credit Suisse
FX Sales Switzerland
St. Leonhardstrasse 3
CH-9001 St. Gallen


Phone: +41 71 226 61 80*
Fax: +41 44 333 36 75

Credit Suisse
FX Sales Switzerland
Uetlibergstrasse 231
P.O. Box 300
CH-8070 Zürich


Phone: +41 44 656 68 00*
Fax: +41 44 333 36 75

Credit Suisse
FX Sales Switzerland
Rue de Lausanne 11–19
1201 Genf

Phone +41 22 394 81 55*
Fax: +41 22 393 83 00

Credit Suisse
FX Sales Switzerland
Quartiere Maghetti
Via Canova 15
CH-6901 Lugano

Phone: +41 91 802 67 30*
Fax: +41 91 802 61 72