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daily foreign exchange rates

Daily foreign exchange rates are currency pair quotations supplied by dealers and/or bank providers through a handful of electronic quotation systems, such as Bloomberg, Reuters and others. Currencies are quoted with the widely used three-letter codes for currencies worldwide: USD, EUR, CHF, GBP, TRY, BRL, etc. Each day at 4pm London time, WM Reuters calculates […]

decentralised treasury

Decentralised Treasury is the system of financial management used by international companies with subsidiaries, in which funding activities, investment and foreign exchange decisions are made by local treasurers instead of one centrally located treasury team. From a foreign exchange risk management perspective, the main argument in favour of decentralised treasury is that it allows the […]

deflation

Deflation is a decrease in the general price level as measured by a broad-based price index. Deflation is often the result of an overvalued currency that raises the cost of labour in relative terms. If, at the same time, the cost of capital is also high —due, for example, to weak and malfunctioning political institutions— […]

delivery date

The delivery date, also known as the value date or maturity date, is the final date by which the currency that was sold in a forward or futures contract must be delivered for the terms of the contract to be fulfilled. In a forward contract, the delivery date (and the underlying amount of currency) can […]

dirty float

A dirty float (also known as ‘managed float’) is an exchange rate regime in which the exchange rate is neither entirely free (or floating) nor fixed. Rather, the value of the currency is kept in a range against another currency (or against a basket of currencies) by central bank intervention. By far the most significant […]

dollar offset method

The dollar offset method is one of the accounting procedures recognised by the International Accounting Standards Board (IASB) to test the effectiveness of a hedging relationship. At each reporting period, the fair value of the forecast transaction (hedged item) and the fair value of the hedging instrument are measured. The resulting differences are recognised in […]

drawdown

In FX forward markets, a drawdown refers to the act of performing an early draw, i.e. exchanging a portion of the total amount specified in a flexible FX forward contract before the expiration of the contract.The period in which the contract holder can activate such drawdowns, for example three months, is established in the contract […]

dynamic hedging

Created by Kantox, Dynamic Hedging is a Currency Management Automation software solution that eliminates all or most FX risk and enables managers to capture the growth opportunities that result from buying and selling in local currencies. By keeping FX risk at bay, Dynamic Hedging allows firms to take control of their own competitiveness. Dynamic Hedging […]