Business Currency Risk Management with MTFX

Exchange rates fluctuates every day. If your invoices are issued in a foreign currency or you pay suppliers overseas, even small shifts can affect profit, cash flow and pricing. A late payment or a long settlement cycle can leave you exposed if the market moves against you. Currency risk management reduces that exposure so you can budget with confidence and focus on growth.

What is currency risk?

Currency or foreign exchange (FX) risk is the chance that exchange rate changes will affect the Canadian dollar, US dollar, or other currencies value of your international transactions.

Main types of FX risk

• Transaction risk: when you agree a price today but settle later. If the rate changes before settlement, your CAD cost or receipt changes.
• Translation risk: when you consolidate financial statements that include foreign revenues. This matters most for businesses with subsidiaries or operations abroad.
• Economic risk: longer-term exposure where persistent currency moves affect competitiveness and pricing power.

Where your business may face FX risk

• Paying overseas suppliers in their currency
• Receiving client payments from abroad
• Long quote-to-cash or procure-to-pay cycles
• Contracts priced in volatile currencies
• Mismatched inflows and outflows across currencies

How MTFX helps you manage FX risk

1. Forward contracts: lock a rate for future settlement

A forward contract lets you secure today’s exchange rate for a known amount and date in the future. This removes uncertainty on costs or revenues for that payment window.

Example: a USD 250,000 supplier invoice due in 90 days can be fixed now so your CAD cost will not change if the market moves.

Good for: budget certainty on dated invoices, project milestones and payroll.

Note: Eligibility, settlement windows and credit terms apply. Your MTFX relationship manager will outline the specifics for your business.

2. Multi-currency accounts: enable natural hedging

Hold and use funds in the currency you earn or spend. If you receive USD and pay USD, you can use those funds directly without converting. Convert only when it suits your cash flow or when you reach a target rate.

Good for: matching foreign inflows to outflows, reducing unnecessary conversions and fees.

3. Rate alerts and target rate instructions

Set alerts for your desired rate so you know when the market hits your level. Where appropriate, place a target rate instruction to automatically book when the market reaches a pre-set rate during trading hours.

Good for: busy teams that want to act quickly without monitoring markets all day.

4. Scheduled and bulk payments

Automate frequent or high-volume payments in foreign currency. Combine with forwards or funding in currency to smooth cash flow and avoid last-minute conversions.

Good for: payroll, retainer fees, subscription vendors and regular supplier runs.

5. Expert insights and account support

Get market updates, corridor guidance and help choosing a mix of tools that fits your objectives, risk appetite and timelines.

Good for: building a policy that finance and procurement can follow.

Choosing a hedging approach: a simple framework

• Map exposure: list foreign currency receivables and payables with dates and amounts.
• Decide objectives: margin protection, price stability or cash flow timing.
• Select tools: fix near-term known amounts with forwards, hold working balances in currency for natural hedging, use alerts or targets for opportunistic conversions.
• Operationalise: set approval limits, booking rules and review dates.
• Review regularly: update the plan as volumes, pricing and markets change.

Getting started with MTFX

• Register for an MTFX business account
• Complete verification with standard business documents
• Discuss your exposures with a relationship manager
• Set up tools like forwards, multi-currency balances, alerts and payment schedules
• Monitor and review using statements, reports and periodic check-ins

Benefits you can expect

• Margin protection: reduce the impact of adverse rate moves on known payments
• Budget certainty: fix costs or receipts for planning and quoting
• Pricing consistency: maintain stable prices for customers in key markets
• Operational efficiency: align FX actions with procurement and AR cycles
• Support and governance: policies your team can apply consistently

Common scenarios and recommended actions

• Quoted a USD price to a client for delivery in 60–120 days: consider a forward to lock the CAD value of your expected receipt.
• Monthly EUR supplier invoices with predictable amounts: set a rolling series of forwards or fund a EUR balance and schedule payments.
• Irregular JPY purchases with some flexibility on timing: hold a modest JPY balance for near-term needs and use alerts for target conversion levels.
• High-volume contractor payments in GBP: use bulk payments funded from a GBP balance, replenished at pre-agreed times or target levels.

Open your MTFX business account and build your FX risk plan today.