A company buying items in US$ is contractually bound to sell them in
Euro to his customer.
The customer insists on fix prices over the course of 12 months.
The risk is on the sellers side being vulnerable for appreciation of the
greenback vis a vis the Euro.
The value in discussion is 200k USD (purchasing value of the seller).
Dollar call options are not allowed (IFRS) to be used as hedging instrument.
What other means can be used to neutralize/minimize the underlying risk?
What is their approximate cost?
Thanks and best regards
- posted 8 years ago