London, 2 April 2025 – A new report from FX-as-a-Service provider, MillTechFX, has revealed that over four-fifths (81%) of corporates hedge their foreign exchange (FX), increasing protection from increased currency volatility, driven by growing geopolitical uncertainty.
The MillTechFX Global FX Report 2025 analyses the findings from surveys of 750 finance leaders at corporates across Europe, the UK and North America, revealing their FX strategies, the impact of domestic currencies, geopolitical influences, operational challenges and more.
As a result of rising geopolitical tensions, 60% of corporates in the UK and Europe plan on extending hedge lengths, while only 10% plan to reduce them. 33% are decreasing hedge ratios, showing they are balancing long-term stability with short-term flexibility. This increase in hedging activity persists despite rising costs, with 80% of corporates facing higher hedging expenses. This was felt most intensely in Europe, where 98% of corporates said hedging costs had risen, compared to 70% in the UK and 73% in North America.
Three-quarters (75%) experienced losses from unhedged risk in the past year. US corporates saw the highest losses in unhedged risk (76%), followed by the UK (75%) and Europe (72%), while over half (52%) are now considering hedging due to market conditions. The UK had the highest percentage of corporates considering hedging (68%), compared to just 36% of European corporates.
The overall average hedge ratio was 48% and there was little divergence across regions. North America and Europe both had hedge ratios of 49%, whereas UK corporates were slightly lower at 45%. Hedge lengths also showed relatively low variation between regions, with an average of 5.3 months. Hedge lengths were the longest in the UK (5.5 months). By comparison, corporates’ hedge lengths were 5.3 months in Europe and 5 months in North America.
The research also reveals that the value of domestic currencies plays a crucial role in business performance, with 88% of firms reporting an impact on their bottom line. This effect is most pronounced in North America (93%), followed by Europe (88%) and the UK (83%).
Other key findings include:
Europe leads the way on FX hedging – 86% of European businesses hedging their FX risk. North American corporates also placed a high value on FX hedging (82%), followed by the UK with a smaller, though still significant proportion of 76%.
Trump optimism – 78% of corporates were optimistic about the Trump presidency, with European firms the most bullish (84%), followed by the UK (81%) and North America (70%), where concerns over a weaker dollar may have tempered enthusiasm.
UK credit crunch – 74% of UK corporates suffered from tightened credit criteria, while 79% had experienced rising fees. This was slightly less of an issue in Europe where 70% of corporates experienced tighter access to credit and 68% suffered from increased fees.
Dependence on manual processes – 34% of corporates rely on phone calls to instruct FX transactions, while 32% use email and 30% send or upload files.
AI and automation on the rise – 100% of corporates are exploring AI and the most popular use case is risk management (45%), followed by FX operations (41%) and process automation (40%). Corporates also believe automation tools are the technology that will have the biggest impact on their business in the next five years.
Eric Huttman, CEO of MillTechFX commented: “The U.S. administration’s shifting policies and rising trade tensions are intensifying market uncertainty. Given the influence of U.S. policy on global markets, it’s no surprise that these dynamics are driving significant macroeconomic shifts particularly in FX markets.
“Our research shows that the vast majority of corporates globally are hedging their FX risk and protecting their bottom lines. We’re also seeing fairly consistent hedge ratios and tenor lengths, as firms move to lock in certainty for longer and ride out the storm. This is despite rising hedging costs which are putting many CFOs across the globe off as they decide to take their chances, rather than lock in security and forgo long-term protection for short-term gain.
“For those that decide to hedge, it can seem difficult to implement. FX hedging has long been plagued by inefficiencies, hidden costs, and a lack of transparency, forcing CFOs to rely on outdated manual processes. However, a shift is underway as firms embrace tech-enabled solutions that digitise and automate the entire FX process, from onboarding to execution and settlement. Those who move away from legacy infrastructure stand to gain greater efficiency, cost savings, and control, while those who don’t risk being left behind.”
Nick Wood, Head of Execution at MillTechFX, commented: “Currency volatility remains a defining theme in 2025, driven by tariffs, geopolitical tensions, and shifting economic policies. The strengthening USD reflects inflationary expectations and U.S. political divergence, while trade disputes and global conflicts continue to reshape capital flows. The return of President Trump has introduced a more transactional approach to foreign relations, impacting key alliances and market stability. Meanwhile, China’s economic strategy, Japan’s policy shifts, and political uncertainty in Europe add further complexity. As investors navigate these macroeconomic forces, currency markets are expected to remain highly reactive throughout the year.”
To find out more about corporates’’ FX hedging strategies, the effect of rising costs, the impact of geopolitics and their desire for automation as well as regional comparisons, download the report here: https://milltechfx.com/resources/currency-insight-and-education/the-milltechfx-global-fx-report-2025/
About MillTechFX
MillTechFX is an FX-as-a-Service (FXaaS) pioneer that enables corporates and fund managers to access multi-bank FX rates via an independent marketplace.
Its end-to-end solution automates the FX workflow and ensures transparent best execution – saving clients time and costs. It offers a fixed fee service model, including third-party transaction cost analysis to ensure total transparency.
MillTechFX harnesses the purchasing power of Millennium Global, one of the world’s largest currency managers, with $28bn group hedges assets* and transactions over $543bn in annual FX volume**. Via the MillTechFX marketplace, clients can directly access preferential FX rates and credit terms from up to 15 Tier 1 counterparty banks.
Headquartered in London, the world’s largest FX hub, MillTechFX is authorised and regulated by the UK’s Financial Conduct Authority (FCA) and registered with the USA’s National Futures Association (NFA)
Media contact
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MillTechFX@chatsworthcommunications.com
