CurrencyVue Pulls SMEs Into FX Hedging

CurrencyVue is helping Australian SMEs enter into the world of FX risk mitigation.

Reports Wednesday (March 22) said the firm has created an FX platform designed for smaller businesses. With plans to launch the platform later this year, CurrencyVue will link into SME banking and accounting systems as they step onto a global stage, helping them reduce exposure to FX fluctuation risk.

“SMEs can be at a huge disadvantage when dealing in FX markets experiencing financial losses due to unpredictable market movements,” said Deputy Premier and Minister for Small Business in New South Wales (NSW) John Barilaro in a statement. The NSW government has reportedly lent its support to CurrencyVue’s project. “Systems to manage FX dealings for big businesses can cost more than $50,000 a year, which may not be affordable for many SMEs. CurrencyVue is targeting a global market for SMEs by providing an easy-to-use platform at a fraction of the cost.”

He added that CurrencyVue will develop and test the solution thanks to a grant from the NSW government and its Jobs for NSW initiative. According to CurrencyVue Chief Executive Matthew Tyrrell, that grant accounted for about 15 percent of the cost of the prototype.

“SMEs need to understand and manage financial risks,” he stated. “For example, post-Brexit the British pound fell about 10 percent against the U.S. dollar, meaning an unhedged U.K. importer paying for USD goods would have added an extra 10 percent cost overnight.”

Recent research suggests SMEs aren’t paying enough attention to FX volatility risk. Analysis from East & Partners concluded that Canadian small businesses had the highest portion of SMEs using FX options to protect against volatility compared to any other geographical market surveyed, but even then only 29 percent of Canadian SMEs say they deployed such tools.