Currency volatility and the margin problem that hedging can't fix

Heightened currency volatility since 2025, driven by tariffs, geopolitical conflict, a weakening US dollar, and divergent monetary policy, has increased the financial stakes for international businesses, with even hedged firms continuing to report substantial losses. The passage argues that selective or “set and forget” hedging addresses only part of FX risk, while routine transaction costs, hidden bank markups, double currency conversions, and delayed visibility into exposures can steadily erode margins. It proposes a three-part approach of holding funds in the currencies needed for future payments, converting only when necessary using transparent rates and controlled timing, and monitoring consolidated exposure across entities in real time. Airwallex is presented as infrastructure supporting this approach through multi-currency accounts, disclosed FX pricing, conversion tools, dashboards, and multi-currency cards, with the broader message that businesses should manage currency operationally rather than rely solely on predicting exchange-rate movements or periodic hedging.

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