Pound Strength Leaves UK Companies Adding Hedges as Pain Mounts
British American Tobacco Plc research and development laboratories in Southampton.
Photographer: Luke MacGregor/BloombergBuffeted by this year’s surge in sterling and the slide in the dollar, British companies are upping their protection against foreign-exchange swings.
More than half of UK corporates surveyed by MillTech — a division of currency manager Millennium Global Investments Ltd. — said they took a negative hit to earnings in the second quarter of this year. Those same firms boosted their currency hedge ratios to about 53% over the period, up seven percentage points compared to the prior-year period.