Companies cut FX hedges to lowest since 2024, survey shows

Companies in the United States and Britain cut their currency hedges to the lowest level in at least two years during Q2, according to a survey by FX and cash management firm MillTech. The average hedge ratio fell from 57% to 46%—the lowest since tracking began in Q1 2024—and average hedge lengths dropped from 6.62 months to 5.7 months. Nearly half of firms hedged 26% to 50% of their exposures, while the share hedging 51% to 75% fell from 54% to 34%, suggesting more tactical, shorter protection. MillTech also cited LSEG data showing realized currency volatility eased after spiking in Q1 when Middle East war began. The survey warns that record-low protection could leave less room for error if inflation or rate paths shift.