Forward currency trades, a hedge instrument widely used by companies to hedge against exposures from commercial export-import transactions, reached an above-average volume in April mainly driven by export companies selling US Dollars.
The April trading volume reached $18.1 billion, 75% higher than the $10.3 billion monthly average in the last 12 months. Considering importers, the US Dollar hedging volume was also high – $14.1 billion – the highest since May 2017. Both trades combined totaled $32.2 billion. Forward currency contracts allow companies to set the future buy or sell price of a foreign currency into Brazilian Reals and enable them to hedge their commercial transactions against exchange rate flutuations during the period.
