Corporate foreign exchange news

Published by Mark Smith-HalvorsenThe approach forex hedging strategists take to the dollar may boil down to their interpretation of two key indexes, one analyst has claimed.In a research note, Nicholas Colas, chief market strategist at BNY ConvergEx Group, explained that the Intercontinental Exchange dollar index (DXY) and the Federal Reserve's trade-weighted index paint very different pictures of the dollar during the 1990s, a key period of global economic development.While the former barely registers a change in the dollar's value, measuring the reserve currency against six major competitors, it does not take into its rise against emerging-market currencies during this period.The Federal Reserve index, which does track these changes, registers an appreciation of as much as 50 per cent during the period."The DXY is only one narrow measure of the strength of the currency. Against a broader index of currencies, the dollar may not be a superstar, but it isn't the absolute dog portrayed by some," wrote Mr Colas.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site