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Situation
Foreign exchange markets constantly fluctuate and will often experience sudden, short-lived spikes. During a market spike against the Japanese yen, Ruesch contacted an importer of luxury textiles that regularly trades in the yen to see if it would be interested in capitalising on the market opportunity. Since the favourable rate would put the importer in a considerable advantage for its upcoming yen transactions, it was interested in making a purchase. Unfortunately, the importer would not be able to adjust their cash flow to make payment for another two weeks. |
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Solution
Because market spikes can last for a matter of minutes or hours, Ruesch offers Short Forward Contracts to help companies take advantage of market opportunities without having to worry about making a payment right away. This type of Forward Contract is available for 3-14 days with an optional 30-day flexible window, which allows companies to pay for and take delivery of their funds at any time within up to 44 days of locking in the rate of exchange—with no deposit required. |
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Outcome
By using a Short Forward Contract, the textile importer locked in a favourable rate before the spike receded and paid for the purchase in the following weeks when its cash flow permitted. |
