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This workflow is designed to simulate and analyze the financial impact of foreign exchange (FX) rate fluctuations on currency exposure, focusing on the local currency, Brazilian reais (BRL). It evaluates the effectiveness of hedging strategies by incorporating multiple hedge percentage scenarios to assess residual impacts and the reduction of financial risks. The workflow leverages reliable data sources, including python-bcb, Python, and KNIME, to load and process exchange rate information. Monte Carlo simulations are employed to generate future exchange rate scenarios, enabling detailed calculations of potential impacts. While the analysis is based on BRL, the methodology can be applied to any currency by simply adjusting the data source. The workflow also generates visual insights and exports the results to Excel, providing actionable recommendations for optimizing hedge percentages and managing currency risks effectively.

Last edited  Jun 24, 2020 9:19 PM