Risk Management

According to the BIS (Bank for International Settlements) 85% of the worlds daily FX volume consists of Spot & Forward FX contracts. 80% of this volume is concentrated in the G-7 currencies.

Commonwealth Foreign Exchange is a financial services firm focused exclusively on helping clients manage their foreign currency spot, forward and hedging strategies.

Managing your currency risk in today’s markets is becoming more complex and given the significant volatility a prudent undertaking. With the significant growth of the FX market, the advancement of technology, the speed of information and transparency in the ability to have a strong partner is essential to navigate today's financial markets.

By focusing exclusively on spot & forward foreign exchange risk management advisory, we can offer our clients competitive pricing, focused advise and seamless settlement for all of your currency needs. We do not offer exotic derivative hedging strategies, an economics team that forecasts inflation in Latin America or proprietary trading models based on algorithms. By focusing on what 85% of the world needs (spot & forward contracts), we continue to enjoy a strong relationship with our valued customers and were never distracted by higher margin exotic instruments that ultimately may not be liquid or appropriate for risk management purposes.

Four Principal Areas of Strength

  • Pricing and Execution

    • Significant provider of liquidity for over 100 currency pairs.
    • Aggressive pricing across markets and products.
    • Expertise in foreign exchange advisory, hedging & structuring.
    • Real-Time, deep liquidity pools in all market conditions.

  • Account Executives

    • Local & National account coverage.
    • Large and well-established team for seamless backup & coverage.
    • Product specialists deliver customised solutions while minimizing total transaction costs.

  • Client Focused

    • Client-specific analyses & trade recommendations to allow you to focus on your core business.
    • Strong reputation of providing fast pricing, competent market advisory & seamless settlement for all currency needs.

  • Risk Advisory

    • Focus on clients’ strategic priorities.
    • Problem solving and solution driven.
    • Extensive trading & sales background in small business, middle market, large corporate & institutional risk advisory solutions.

Currency Analysis and Strategy

Foreign exchange analysis and strategy is designed to assist clients in their currency decision process, including strategies for hedging, active management versus investment benchmarks and absolute return.

The currency decision approach begins with extensive understanding of customers international business, risk tolerance, fundamental analysis, benchmarking particular to individual client needs.

  • Primary risk management strategies / services include:

    • Spot Contracts – Pricing in over 100 currency pairs
    • Forward Contracts – Deliverable Pricing in all liquid currencies
    • Forward Window Contracts – Deliverable forwards over a “window” of time (i.e. 30, 60, 90 days)
    • NDF Forward Contracts – Non-deliverable pricing in; On-Line FX Trading – via “CFX On-Line”
    • White Label – Ability to provide your customers with real-time FX rates / payment ability
    • Foreign Currency Consignment Accounts- in 20 currencies
    • Foreign Currency Receivable – Same day notification / conversion of FX receivables to speed up cash flow
    • Currency Risk Management Policy – Assistance in writing, implementing & executing a currency risk management policy for all industry types.
    • Daily, Weekly, Intraday – Market updates that impact your business Collateral – For FX Hedging can be in USD, local currency, Letters of Credit.

  • Pricing Advantages of Using Commonwealth for FX Needs:

    • 24 hour FX Pricing Capability.
    • “Leave Order” Capability – Critical for Trade Entry / Exit.
    • 24 Hour Order Execution.
    • Same pricing for small or large amounts.
    • Quiet / Confidential Execution of trades.
    • No additional “Fees”.
    • No pushing inappropriate (ie more profitable) exotic hedging strategies.
    • No “tying” of services / products.
    • No “credit” hurdle priced into FX spot & forward rates.
    • No debt, TARP money taken, proprietary fx trading losses impacting FX pricing.