The global economy exited Q1 2021 quite a bit differently than it exited Q1 2020. Instead of economic activity falling off a cliff, many sectors have rebounded strongly. Deflation has rapidly turned into inflation, fear has turned into greed, and fundamental research has apparently been replaced by memes. Foreign exchange volatility has been reduced compared to a year ago, but is this the calm before the next storm?
FX rates represent the clearing prices between all of the different supply and demand fundamentals, deficits, interventions, etc around the globe. Increased commodity prices, disrupted supply chains, and widely differing pandemic situations wreak havoc on “business as usual” and can easily set off a new round of significant FX volatility. Last spring’s FX volatility exposed many companies to underlying problems with their FX risk management – some have rectified these issues, while others have merely had improved results due to the decline in volatility, with little improvement in their ability to navigate choppy waters, should they return.
If you suspect your company is in the latter situation, now is the time to contact AtlasFX and let us help you solve your FX risk management problems. We have the technology and the domain expertise to get it done.