Treasurers are consistently faced with the challenge of managing P&L and its principal drivers. FX risk arising from balance sheet exposures might have a material impact on the company’s financial result and is often affected by various sources of “noise”. Hedging and valuation are frequently linked to a specific target rate, which acts as a main driver of hedging effectiveness and therefore requires a precise and strategic management approach. In an environment of extreme intra-day volatility, the moment a hedge is executed can ultimately define the P&L outcome. This raises a critical challenge: what is the most effective way to synchronize the timing of accounting rate fixing, hedging execution and cash flows to protect results?

HUGO BOSS AG partnered with Bank of America to develop an innovative, automated, FX transaction-based risk management solution to de-risk balance sheet currency exposures while minimizing balance sheet noise. In this session, we present the solution and describe the journey to get there.