Here’s an easy way to lose $10,400 without doing a thing: Let’s say you sold goods to an American customer worth US$250,000 on June 22. On that day, with the loonie trading against the greenback at C$1.0634, your sale would have been worth C$265,850. But say your American customer pays you on August 5, when the U.S. dollar had fallen to C$1.02168. Suddenly that $265,850 has shrunk to $255,420. Through foreign exchange movements a big slice of money that could have been yours vapourizes.
Hedging will help you weather the crisis
During the current financial crisis it’s more important than ever to protect cash flow from wild currency swings
- By: Jared Mitchell
- From: Business without Borders
- Date: Thursday August 11th, 2011