Podcast
Mastering Currency Risk in Trading Companies - Strategic Tools for Finance Leaders
In this episode, our Chief FX Strategist explores the critical components of foreign exchange risk management in internationally trading companies. From understanding trade flows and seasonal cycles to evaluating competitive dynamics, Sharon outlines how finance leaders can take control of FX exposure to reduce costs and improve decision-making.
She explains the advantages of managing currency risk in-house, how to move from reactive to proactive strategies, and the vital role of technology in integrating data across orders, invoices, and banking systems. The conversation also touches on audit readiness, scenario planning, and tailoring FX insights for different levels of the business, from operations to the boardroom.
Tune in for practical guidance on creating a robust FX strategy, avoiding common pitfalls, and leveraging technology and human insight to navigate volatile markets with confidence.
Key Takeaways
In today’s volatile FX environment, trading companies face growing pressure to protect margins, manage cash flow, and respond to shifting market conditions. This episode explores how finance leaders can elevate their approach to currency risk by leveraging better data, integrated technology, and strategic oversight.
From trade flow mapping to audit readiness and system integration, this conversation offers practical steps for transforming foreign exchange risk from a reactive burden into a strategic advantage.
Key takeaways include:
- Currency Risk Starts with Trade Flow Visibility:
Effective FX management begins with a clear understanding of real-time order and invoice data. Finance teams must bridge the information gap between procurement, sales, and accounting to anticipate exposure and act ahead of market shifts. - Proactive Strategies Outperform Reactive Decisions:
Waiting until invoices are booked often results in missed opportunities and unnecessary risk. Companies that manage exposure earlier, guided by live data, achieve better rates and more control over outcomes. - Technology Is a Necessity, Not a Nice-to-Have:
Manual spreadsheets can no longer support the complexity of multi-currency operations. Dynamic, integrated platforms and API connections enable speed, accuracy, and seamless FX data management. - One Policy Doesn’t Fit All:
Rigid or overly theoretical FX policies often break down in the real world. Finance leaders need practical, adaptable frameworks that reflect commercial realities, supplier dynamics, and evolving market conditions. - Audit Readiness Requires Holistic Data:
Auditors frequently lack FX expertise. Companies must present reconciled, strategy-aligned data—spanning hedges, exposures, and costing rates—to avoid misstatements and defend financial outcomes. - Board-Level FX Insight Is Critical:
Currency risk impacts strategic planning, not just operational finance. Scenario analysis and simplified board reporting help translate volatility into clear risk narratives for executive stakeholders.
These takeaways equip finance directors, treasury managers, and trading company executives with the knowledge and tools to move beyond basic FX compliance toward smarter, data-driven decision-making that protects the bottom line.
Understanding Foreign Exchange Risk
- FX risk applies only to companies engaged in international trade.
- Working in the source currency can help reduce costs and improve control.
- Key considerations include trade volumes, seasonality, pricing flexibility, and competitive dynamics.
Proactive vs Reactive Management
- Market volatility, often driven by macroeconomic trends, requires agility.
- Finance leaders should anticipate rather than respond to FX impacts.
- Decisions must be based on timely, accurate data aligned with internal policies.
Extracting and Integrating Data
- Efficient data flow is critical; automation reduces manual effort.
- Integrating order, invoice, and bank data helps build a complete picture.
- Dynamic databases outperform static tools like Excel for FX oversight.
Dynamic Data Management
- APIs help maintain real-time visibility of orders, invoices, and transactions.
- Reconciling these data sources supports timely hedging and reduces risk.
- Manual methods are outdated and prone to error.
Common Data Challenges
- New clients often face issues with data availability, outdated tools, or inappropriate FX instruments.
- Businesses need to adapt FX strategies as trading conditions evolve.
- Lack of human support on online platforms often leads to avoidable errors.
Supporting Financial Audits
- Quality data enhances audit readiness and year-on-year comparisons.
- Auditors may lack FX expertise; businesses must present a full, accurate picture.
Data Use Across Organisational Levels
- Data presentation should vary by audience, from operations to the board.
- Scenario planning helps leadership assess potential FX impacts.
- Reports must balance simplicity and relevance to support strategic decisions.
Solutions for Finance Leads and Internationally Trading Companies
- CC Currencies provides full-service FX management: trading, accounting, cash flow, and reconciliation.
- Helps clients shift from reactive to dynamic, tech-enabled FX oversight.
- Encourages collaboration rather than internal tech development.
Featured Article
Trading companies face growing FX risk. Discover how finance leaders are transforming exposure into strategic advantage with smarter data, dynamic systems, and proactive decision-making.
Learn how trading companies use real-time data and proactive strategies to manage currency risk and protect their bottom line.
Host
Sharon Constançon is a trailblazer in the world of forex treasury management, bringing over 40 years of expertise to businesses navigating complex global markets. As South Africa’s first female Chief Forex Dealer, Sharon led innovative solutions and laid the foundation for what has become a vibrant Forex services market in the region. In 2009, she founded Valufin, a global leader in tailored treasury services, empowering companies to manage forex risks confidently and optimise their financial outcomes.
Throughout her career, Sharon has worked with over 200 international companies, helping them address the pitfalls in forex processes, implement effective accounting systems, manage transaction risks, and develop insightful management information. Her strategic approach ensures businesses are equipped to handle currency volatility and achieve financial stability.
A forward-thinker with a deep understanding of technology, Sharon has developed two SaaS platforms: FRM, the cornerstone of Valufin’s treasury services, and Hawk, which delivers advanced intelligent assessments. These innovations exemplify her commitment to driving efficiency and effectiveness in forex treasury management.
Sharon’s career began in the mining sector with a company now part of the Anglo-American Group before transitioning to forex management roles at Blue Circle and Société Générale in Johannesburg. In 1988, she founded Constançon Currencies, a pioneering forex services firm, before shifting her focus to governance and launching businesses in both South Africa and the UK.
In addition to her work in forex, Sharon is a respected voice in governance and boardroom dynamics. She lectures, conducts training, and speaks at global conferences, sharing her expertise on effective board practices and strategic risk management. Sharon’s ability to bridge the worlds of forex and governance makes her a sought-after leader, mentor, and educator in her field.
Volatile Markets? Protect Your Margins.
Facing currency volatility and exposure risks? We’ll help you optimise your FX strategy and safeguard your bottom line.
Schedule a consultation with our forex risk specialists today.
