Treasury · FX hedging
DashboardCorporate treasuryStatic, layered or commitment-based: an FX hedging dashboard for each policy
The hedge policy decides what a treasury dashboard has to show. This guide compares three common policy designs and sets out the panels, rules and monitors that keep each one honest.
Valnora & Elric team5 min read
Treasury teams rarely lack data about foreign exchange exposure. They lack a single view that compares that data with the hedge policy the board approved. The ERP holds forecast receipts and payments, the treasury system holds the trades, and the comparison happens in a spreadsheet the week before the committee meets.
The right view depends on the policy. A static ratio, a layered policy and a commitment-based policy each ask a different question of the same data. This guide compares the three designs and sets out the dashboard, rules and monitors each needs in Agent Serve Dashboards. Choosing the policy itself is a decision for your treasury committee and board, often with advisers. The aim here is to make whichever policy you choose visible every day.
The three designs side by side
Three hedge policy designs and the dashboard each needs
| Policy design | How it works | Fits when | What the dashboard must show | Rule and monitor |
|---|---|---|---|---|
| Static ratio | Hedge a fixed share of forecast exposure, for example a set percentage of the next 12 months, topped up each period. | Exposures are steady and forecasts are reliable. The team wants a simple rule the board can follow. | One hedge ratio per currency against a single target, plus forecast changes since the last top-up. | Flag currencies more than a set distance from target. Alert when any currency is flagged. |
| Layered | Hedge ratios step down with distance: high for the next few months, lower further out, added in layers over time. | Forecasts get less certain further out, and the team wants to average into rates over time. | A maturity ladder by currency and month with the band for each bucket, so gaps further out stand out. | Label each bucket under, within or over its band. Alert when any bucket is outside band. |
| Commitment-based | Hedge only firm commitments, such as signed contracts or confirmed orders, usually close to fully. | Exposures come from discrete contracts rather than a steady flow, and forecasts are hard to trust. | A list of commitments with hedge status, plus unhedged commitments by age. | Flag commitments unhedged after a set number of days. Alert on any such row. |
Many groups combine designs, for example a layered policy for forecast flows and a commitment-based one for large contracts. The dashboard can show both, with a filter for policy type.
When a static ratio is the right view
A static ratio suits groups with steady, predictable flows, such as a business with regular foreign currency sales across many customers. The question the dashboard answers is simple: for each currency, is the hedged share close to target?
Build it with one governed ratio metric, hedged notional divided by forecast exposure, and a KPI tile per main currency. Add a comparison to the previous period so the committee sees whether the ratio drifted because hedges matured or because the forecast moved. The second is easy to miss and often the real story.
When a layered view is the right view
A layered policy is common when forecasts become less reliable further out. The view must work in two dimensions, currency and month, because a ratio that looks fine on average can hide an empty bucket nine months out.
The example dashboard shows this design. The chart compares forecast EUR exposure with hedged notional per month, and the tiles split the hedge ratio into near and far buckets. Here, the next three months sit inside their band, while months seven to twelve sit below it. Figures are illustrative.
A rule labels each currency-month bucket as under, within or over its band, using the band values from your policy. Drill-down by entity then shows which subsidiary’s forecast moved.
When a commitment-based view is the right view
Commitment-based hedging suits groups whose exposures come from discrete contracts, such as project businesses or importers placing large orders. The unit of analysis is the commitment, not the month.
Use a table panel of commitments with currency, amount, signing date and hedge status. A rule flags any commitment still unhedged after the number of days your policy allows. Sorting by age makes the oldest gaps the first thing the treasurer sees.
Monitors and reporting for any design
What the solution produces
Monitor alert to the treasurer (illustrative)
MessagePolicy breach monitor: 3 currency-month buckets are outside their hedge ratio band.
EUR, May to July: hedge ratio 22% against a band of 30–50%. Forecast receipts rose €3.1m this week.
USD, December: hedge ratio 94% against a band of 70–90%, after a lower payments forecast.
Open the hedge policy view for detail by entity.
Whatever the design, a monitor closes the loop. A rule monitor fires when the outside-band rule matches at least one bucket or commitment, with severity set by how far outside the band it is. Alerts go in-app, by email, or to a Slack or Teams channel through a webhook, and resolve on their own when the position returns to band.
Annotations let the treasurer mark when a policy band changed or a large contract was signed, so later readers can see why a line moved. A weekly scheduled report sends the view as a PDF to the treasury committee. Row-level access policies can limit entity finance teams to their own exposures while group treasury sees everything.
Hedge accounting is a separate question. If you apply hedge accounting under IFRS 9, your documentation and effectiveness work sits with your accounting team and auditors. The dashboard can supply consistent exposure and hedge data to that work, but it does not perform it.
Controls and governance
Row-level access
Row-level policies narrow what each person sees in tables, dashboards, exports and scheduled reports.
Roles and permission groups
Admin, write and read roles per workspace, plus permission groups that limit which models, blocks and integrations a team can use.
Audit trail
Proposals, approvals, declines and executed actions are written to the workspace audit log, which admins can export.
SSO and SCIM
Sign in through your identity provider with SAML 2.0 or OIDC, and provision people with SCIM.
Self-hosting
Run Agent Serve in your own cloud or data centre, next to the systems it reads.
Bring your own keys
Use your organisation’s own model provider keys at organisation or workspace level.
More on how Agent Serve handles access, data and audit on the security page.
Getting the data in
Connect the warehouse or database that holds ERP forecasts and treasury trades through Data sources, and describe exposures, hedges, currencies and entities once in the semantic model. If the treasury system only exports files, a scheduled workflow can load them into a table first. For scenario modelling on the same dashboard tools, see loan pricing scenarios, which uses the scenario workbench for side-by-side compare and sensitivity analysis.
What you need
- Forecast foreign currency exposures by entity, currency and month from your ERP or planning tool
- Hedge trade data from your treasury management system, including maturity dates
- Your hedge policy, with bands or targets per time bucket
- Agreed definitions for exposure, hedged notional and hedge ratio
- A named treasurer who owns the monitors and the weekly review
- Row-level access rules if entity finance teams should see only their own exposures
From exposure data to a hedge policy view
Data · Exposures and hedges
- 01Forecast exposuresForecast foreign currency receipts and payments by month, from the ERP or planning tool.
- 02Hedge tradesForwards, swaps and options with notional, rate and maturity, from the treasury system.
- 03Semantic modelLinks exposures and hedges by currency pair, entity and maturity month.
- 04Hedge ratio metricHedged notional divided by forecast exposure, defined once as a governed ratio metric.
Dashboard · Hedge policy view
- 05Exposure and hedge ladderExposure, hedges and hedge ratio by currency and month, against the policy band.
- 06Outside band ruleLabels each currency and month as under, within or over the policy band.
- 07Policy breach monitorAlerts the treasurer when any bucket stays outside its band.
- 08Treasury committeeReviews the view and decides any trades. Nothing is executed from the dashboard.