U.S. Bank has extensive expertise at analyzing market developments and tailoring foreign exchange products to fit a particular customer's needs. We can assist you with managing the risk of foreign exchange, maintaining foreign currency accounts, and updating your organization on foreign exchange markets.^*

Risk Management and Hedging

Risk Management
Risk identification is the first step in evaluating foreign exchange exposure. U.S. Bank can help identify and analyze both hidden and overt risks:

• Translation Risk - accounting-based risk stemming from the translation of financial statements from one currency to another
• Transaction Risk - associated with the potential gains and losses on a given transaction susceptible to foreign exchange rate movements
• Sovereign Risk - associated with political risk, the stability of foreign governments and maintenance of favorable relations with the United States
• Exchange Risk - affected by government exchange controls, availability, and the transfer of "hard currency" out of the foreign country
• Economic Risk - a competitive risk that gauges whether a competitor will set prices in local currency over U.S. dollar pricing

Hedging Alternatives
To limit your exposure to changes in foreign exchange rates, U.S. Bank employs techniques, commonly called hedging, which include:

• Forward Contract - the outright purchase or sale of a foreign currency for a date in the future
• Investing or Borrowing in a Foreign Currency - creates a future receivable or payable that might offset other exposures in that currency by investing or borrowing in a foreign currency
• Call or Put Option - ensures the buyer of the option to purchase or sell a currency at a fixed rate without the obligation to do so. The buyer pays a premium for that privilege. (A good choice for a contingent liability or to provide protection with the opportunity for gain.)
• Range Forward - allows you to profit on currency moves up to a predetermined level, while limiting your risk of downward movement by committing to exchange currencies within a band of rates at a set time in the future

Executing Foreign Exchange transactions on the Internet
U.S. Bank offers secure, Internet based execution of foreign exchange transactions, transmittal of settlement instructions, online confirmation and reports on activity and outstanding contracts via U.S. Bank Foreign Exchange Web (FX Web).

Our FX traders will be available to provide personal assistance.

Seminars
U.S. Bank Foreign Exchange seminars offer both newcomers and seasoned currency managers valuable insights into day-to-day foreign exchange trading. Seminars are designed for importers, exporters, corporations with overseas subsidiaries, or companies considering acquisitions or divestitures in foreign currencies and are offered several times per year at various U.S. Bank locations. U.S. Bank also offers Foreign Exchange Options Seminars that cover basic option theory and the practical use of derivative strategies.

For more information on our International Banking services, contact us.

Foreign Exchange Rates