MillTechFX, a subsidiary of currency management firm Millennium Global Investments Ltd., conducted a survey of senior finance executives in the US and the UK in January. The survey found that more than three quarters of senior finance executives suffered losses last year due to unhedged currency risks. This damage to profits has led companies to increase their investment in options, which give them the right (but not the obligation) to buy or sell currencies, and to extend the duration of foreign exchange hedging.
Eric Huttman, CEO of MillTechFX, said in a press release on Tuesday: “The risk of unexpected and sharp currency fluctuations has increased market uncertainty.” “Purchasing more foreign exchange options and extending the hedging period are the most popular adjustments, indicating that companies hope to gain more protection and flexibility.”
According to MillTechFX, nearly one-third of companies in the US and the UK said they plan to extend their hedging periods. About 32% of the companies indicated that they intend to purchase more foreign exchange options, while 26% said they will increase their hedging ratios, that is, the number of risk exposures they hedge. MillTechFX stated that the availability of bank credit, inflation and geopolitical shocks have all affected currency hedging plans.
The Bloomberg Dollar Spot Index rose by approximately 8% in 2024, marking its best annual performance since 2015. As of December, the index had reached its highest level in more than two years. However, the dollar has declined by about 1.5% this year due to the uncertainty surrounding the economic plans of the Trump administration.
British businesses also found themselves in a difficult position. The pound rose to its highest level against the US dollar in two years in September, but it plunged at the end of the year as investors’ concerns over the new Labour government’s spending intensified. The pound rose by about 0.7% against the US dollar in 2025, but lagged behind almost all G10 currencies.
Hertman said, “All of this has led to increased volatility in the fourth quarter.” He pointed out that currency fluctuations intensified before the US election. Before the November 5th election, the price of hedging against dollar fluctuations soared to the highest level since the outbreak of the pandemic in early 2020. Another indicator of global currency volatility – Deutsche Bank’s FX Volatility Index – rose to its highest level in more than a year in December.
Technical analysis:
Gold: Yesterday, our plugin reminded us to pay attention to the pullback confirmation at the 2900 level for a buy. As a result, the price dropped to the lowest point of 2907 yesterday and then rebounded strongly. This morning, it reached the highest point near 2940. Currently, the initial support below is at 2920/25. Within the day, you can continue to use this point as a potential reversal point to carry out a buy limit operation. For detailed positions, please consult the plugin.
(15-minute Gold Chart)
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The Nasdaq index: After testing the 22,000 psychological level, it has rebounded strongly by nearly 1% and is currently consolidating around 22,280. For today, we suggest maintaining a two-hand preparation: 1. A buy limit order near 22,180; 2. A buy stop order after breaking through 22,300. For detailed positions, please consult the plugin.
(15-minute Nasdaq Index chart)
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Crude oil: The upward trend remains intact. Despite intraday price fluctuations, all have been supported by the demand zone, advancing step by step. Focus on the intraday momentum break at 71.80/72, and consider a buy stop operation. If the follow-up long position does not perform well, wait for the price to retest the low at 71.20/30 before seeking another opportunity to buy. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key financial data and events to focus on:
21:30 US New Housing Starts for January (Annualized Monthly Rate)
