US and UK companies are rushing to implement currency hedging strategies following the Iran-Iran conflict that shook global markets.

US and UK companies increased their currency hedging to their highest level in over two years, following conflicts in the Middle East and soaring energy prices that impacted global financial markets.

On May 27, 2026, at 3:00 PM, Bloomberg News reported that companies in the US and UK significantly increased currency hedging in the past quarter following the Iran-Iran conflict which created volatility in global financial markets, according to a recent survey by MillTech, a company providing a foreign exchange and cash flow management platform.

The survey indicates that corporate treasurers hedged an average of 57% of their total foreign exchange risk in the first quarter, up from 49% in the previous quarter and the highest level since MillTech began collecting data in early 2567.

Eric Huttman, CEO of MillTech, stated that several international events have accelerated companies' hedging efforts, including the US arrest of Venezuelan President Nicolás Maduro in January and soaring energy prices due to conflicts in the Middle East.

He stated that this trend reflects businesses taking a more proactive approach to managing currency risk amidst increasingly volatile market conditions.

In the first quarter, the Bloomberg Dollar Spot Index strengthened by about 1%, driven by buying of the dollar as a safe-haven asset following the Iran-Iran conflict, which fueled market concerns and reduced investor expectations of interest rate cuts by the Federal Reserve (Fed).

For U.S. multinational corporations, a stronger dollar negatively impacts their foreign revenue and reduces the competitiveness of U.S. products in the global market, even though it may lower the cost of importing goods or components from abroad.

Conversely, British companies face higher import costs from the United States as the dollar strengthens against the pound.

Meanwhile, the JPMorgan Global FX Volatility Index, which measures the volatility of global currency markets, surged in late March to its highest level since mid-2568 before beginning to decline later as investors monitored progress on the ceasefire agreement between the United States and Iran, as well as the direction of the Federal Reserve's interest rate policy.

MillTech surveyed 250 companies in the US and UK with market capitalization ranging from $50 million to $1 billion, and most companies indicated that the most severe currency impact came from increased import costs and volatility in profits and cash flow.

Although geopolitical tensions have driven increased demand for hedging, firms indicate that access to credit remains the most important factor shaping currency risk management decisions.

Because hedging transactions such as forward contracts, swaps, and options often utilize credit lines from banks and may require additional collateral, hedging costs will increase if banks tighten lending standards.

Huttman said that by 2569, banks will continue to tighten lending standards, making it more difficult for businesses to access credit, citing a survey of senior credit officials at the Federal Reserve in April.

Reference: www.bloomberg.com

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