US, Canada firms rethink Cash Management amid FX volatility

By Puja Sharma

US policy uncertainty stalls North American corporate investment as FX risk becomes boardroom issue

• 90% say policy uncertainty has delayed investment decisions
• 82% hedge currency risk, while 72% of non-hedgers are now considering hedging
• 81% have adjusted sourcing or manufacturing strategies due to dollar volatility

According to a report from advanced FX and cash management solutions provider  MillTech, reveals that 90% of North American corporates have delayed investment decisions over the past 12 months due to US policy uncertainty, with 39% saying their decisions have been delayed significantly.

The MillTech North America Corporate FX Report 2026 analyses the findings from a survey of 250 senior finance decision-makers at mid-sized corporates across the US and Canada. The report explores how firms are adapting FX strategies amid policy uncertainty, dollar volatility, shifting rate expectations, supply-chain disruption and rapid technological change.

Federal Reserve / Bank of Canada rate policy is the biggest external factor influencing FX hedging strategy, selected by 38% of respondents, followed by US tariffs and trade policy (33%) and Middle East geopolitical tensions (28%).

This uncertainty is feeding directly into corporate operations, with 81% of firms saying recent dollar volatility has led them to adjust sourcing or manufacturing strategies in ways that impact FX transactions, including 32% that have significantly altered their supply chain.

Dollar volatility is also creating varied outcomes across the region, with almost three-quarters (72%) saying it has had a positive impact on FX returns, while 19% report a negative impact.

Hedging remains important but has dropped as firms recalibrate against an uncertain backdrop. Over four-fifths (82%) of North American corporates hedge forecastable currency risk, down from 91% in 2025 but broadly in line with 2024 and 2023. Among firms that do not currently hedge, 72% are now considering doing so given market conditions, the highest level in four years, suggesting the drop could be temporary.

There are ongoing cost pressures, though growth has eased slightly. The mean increase in hedging costs was 52% in 2026, down from 76% in 2025, while 8% of firms say hedging costs have more than doubled. Firms are also adjusting strategies in response to policy uncertainty, with 48% planning to increase hedge length and 47% planning to increase hedge ratio.

Key findings:

FX goes digital, but email use doubles – Online user interfaces are now the most common way to instruct FX transactions, used by 55% of firms. However, email has surged to 50%, more than doubling from 24% last year, while phone use has risen to 33%.

Visibility is the new FX bottleneck – Lack of real-time data and transparency is the top operational challenge, cited by 28% of respondents. Getting comparative quotes ranks second (26%), while onboarding liquidity providers ranks third (26%).

Hedging barriers – Among firms that do not currently hedge, the top reason for not hedging is that capital is better deployed elsewhere (35%), followed by burdensome hedging infrastructure (30%), minimal exposure (22%) and cost (13%).

Automation and AI move beyond adoption but barriers remain – Price discovery is the top process being considered for automation (48%), followed by risk identification (43%) and trade execution (43%). Almost every respondent is exploring AI, with process automation and risk management among the leading use cases. However, scaling AI safely remains a challenge, with model risk/governance concerns (19%), cyber/privacy concerns (18%), and integration (14%) the biggest barriers.

Eric Huttman, CEO of MillTech, commented: “North American corporates are facing a market where policy uncertainty is delaying investment decisions and reshaping business strategy. FX risk has become a boardroom issue. Our research shows that there is no single FX playbook that works for every corporate. Some firms are benefiting from dollar volatility; others are being hit hard by it. The firms that come out ahead will be those that build the right setup for their own exposures, combining disciplined hedging, multi-bank access, real-time visibility, stronger governance and intelligent automation.”