Shane McDaniel is a Managing Director in Mesirow Investment Banking He is responsible for developing key relationships leading deal teams throughout the transaction process and providing advisory services on middle-market M&A assignments within the technology and services sector Shane has devoted his career to serving institutional investors including prominent venture capital and private…

Shannon Walker is a Vice President in Mesirow Currency Management Her primary responsibilities include the analysis reporting design and marketing material production of Mesirow Currency Alpha & Macro strategies Shannon has thirteen   years of industry experience in marketing and investor relations Before joining Mesirow she was a Senior Marketing Associate at The Cambridge Strategy  In…

Shauna Kelly-Moran is a Vice President and Client Relationship Specialist in Mesirow Wealth Management She is responsible for day-to-day client service and communications including client portfolio analysis trade requests account processing and documentation Shauna joined the firm in 2005 and has 19 years of experience in the financial services industry Shauna earned her Bachelor of Arts from the…

Shelley Letner is a Vice President and Client Relationship Specialist in Mesirow Wealth Management Shelley’s responsibilities range from establishing client relationships handling general account maintenance and tasks to creating solutions to meet complex client needs Shelley delivers exceptional value to clients with high touch personal service Shelley joined the firm in 2003 and has 30 years of…

Free float vs managed float currency exchange rates which one is better, There are approximately 180 currencies in the world and eight major ways for countries to manage the value of their currency Management often takes the form of influencing currency exchange rates the value of one currency relative to another That influence can range from no or minimal intervention (free floating currency exchange rates to tight government management (capital controls with fixed…, Bank for International Settlements Survey, The Bank for International Settlements a bank for the world’s central banks surveys the foreign exchange market in April every three years and reports currency trade volumes Table 1 and Figure 1 present currencies with over 5 percent of the global volume traded in the 2022 survey TABLE 1 CURRENCY TRADING BY PERCENT OF TOTAL TRADING APRIL  , 2019, 2022, Currency management strategy, US dollar, 883% 885% Free float, Euro, 323% 305% Free float, Japanese yen, 168% 167% Free float, British pound, 128% 129% Free float, Chinese renminbi, 43% 70% Managed float with currency basket, Australian dollar, 68% 64% Free float, Canadian dollar, 50% 62% Free float, Swiss franc, 49% 52% Free float   FIGURE 1 CURRENCY TRADING BY PERCENT OF TOTAL TRADING APRIL, USD, | US dollar   , EUR, | Euro   , JPY, | Japanese yen   , GBP, | British pound   , CNY, | Chinese renminbi   , AUD, | Australian dollar   , CAD, | Canadian dollar   , CHF, | Swiss franc   Source Bank for International Settlements Triennial Central Bank Survey April 2022 | bisorg/statistics/rpfx22_fxhtm Seven of the top eight currencies in the BIS survey are free floating Free-floating currencies are those whose exchange rates fluctuate in response to supply and demand In 2019 and 2022 the US dollar was on one side of about 88% of all currency trades far outpacing…, Free floating currencies, Free-floating currencies were borne out of the collapse of the post-World War II financial order in which gold was converted to US dollars at $35 per ounce Other nations maintained their currencies at a fixed exchange rate with the dollar These gold-to-dollars-to-other-currencies exchange rates lasted until the early 1970s when economic conditions made it increasingly difficult for the United…, Self-correcting adjustments, | The currencies adjust to economic situations such as unbalanced trade or capital flows If a nation has a trade deficit then its currency could depreciate to make imports more expensive and exports cheaper reducing the gap between imports and exports , Monetary policy, | A flexible exchange rate allows a central bank to set interest rates without the concern that a central bank would have if its currency exchange rate was fixed Changing interest rates could alter the demand for the currency pressuring the fixed rate , Safe haven, | A floating currency can act as a buffer against external shocks In tumultuous times investors turn to safe haven currencies like the US dollar and Swiss franc then buy government bonds driving prices up and yields down A stronger dollar or franc can make imports cheaper , Lower foreign exchange reserves, | A floating exchange rate means a central bank can keep smaller amounts of foreign currencies compared to those which must defend a fixed exchange rate Lower amounts of foreign reserves reduce costs and increase efficiency And because nothing is perfect disadvantages of a floating exchange rate, Unanticipated volatility, | A free floating currency can be volatile causing investors and businesses to delay investment or business activity while the currency is unsettled, Inflation, | If a country is dependent upon imports a depreciating currency can increase inflation making those imports more expensive, Safe haven, | A safe haven currency offers advantages but a strengthening currency can make exports more expensive , Debt, | If a nation issues debt in a foreign currency principal and debt repayments can be expensive if the domestic currency depreciates, Managed float, Before 2005 China pegged the renminbi rate to the US dollar In July 2005 the People’s Bank of China the country’s central bank announced China would use a managed floating exchange rate in which the renminbi would be allowed to float in a narrow margin (+/- 2% around a fixed base rate The Chinese central bank determines that fix rate each day based on market supply and demand with reference to an…, Current affairs, That trade competitiveness puts the renminbi high on President Trump’s list of nations with large trade imbalances with the United States Table 2 and Figure 2 show an increasing gap between exports and imports (discounting the two years following the pandemic in the new century TABLE 2 EXPORTS TO AND IMPORTS FROM CHINA ($M, Year, Exports to China, Imports from China, 1999, 17707 84637, 2004, 42236 203085, 2009, 86766 307347, 2014, 166374 484566, 2019, 167475 469514, 2023, 195524 447668   FIGURE 2 EXPORTS TO AND IMPORTS FROM CHINA ($m Source Bureau of Economic Analysis and Mesirow | https//wwwbeagov/news/2025/us-international-trade-goods-and-services-november-2024, More recent currency affairs, A weaker currency also helps with tariffs A strengthening dollar/depreciating renminbi since early 2022 (Figure 3 results in a low import price before the US applies tariffs That means Chinese goods are less expensive in the US than they would be if the renminbi had been strengthening The United States has become increasingly frustrated with Chinese trade actions claiming the Asian nation engages…, Free floating vs managed float – which one wins, So which currency management strategy is best As western asset managers long accustomed to free floating currency systems we’d be inclined to give the nod to currencies whose exchange rates change at the whim of supply and demand But there are plenty of examples of free-floating currency exchange rates that have been manipulated managed so it’s hard to fault China and its managed float In the end…, Explore more currency insights, The powerful and wide ranging effects of currency exchange rates, Keeping an eye on currency trends and information can explain the ‘why’ of economic events that have life-altering consequences for people and nations  Read article, Understanding currency quotes, Learning how exchange rates are presented and what they signify can offer a clearer view of the economic trends and market forces shaping currency values  Read article, Four strategies to reduce liquidity management stress, Different approaches can help investors manage the liquidity challenges associated with their currency program  Read article

Simon Mui is a Managing Director at Mesirow in the Institutional Sales and Trading group  He is the head of mortgage research and a desk strategist focusing on securitized products with emphasis on the CMBS and RMBS markets Simon has over 20 years in the industry focusing on securitized products  Prior to Mesirow Simon spent 16 years at Deutsche Bank where he served in Valuation Risk Management…

For many employees the 401(k is the bedrock of their retirement plan  At large companies the availability of such an important retirement vehicle is often taken as a given and the administration of the plan an afterthought to be handled by the Human Resources department  However for the self-employed or small business owner establishing and maintaining a 401(k plan can be time consuming and…, In these circumstances while it may be feasible to act as a plan administrator on your own 401(k plan the process of setting up and maintaining these types of plans often requires a large amount of paperwork processing accountant-level bookkeeping and a firm understanding of everchanging legal guidelines  It can quickly eat up precious hours for a small business owner and can be quite…, How a Third Party Administrator (TPA can help, TPAs are hired to assist with the management and maintenance of your company’s retirement plan  Communicating with participants keeping accurate records and plan documents and ensuring compliance with government regulations are just a few of the responsibilities a TPA will take on for you Tasked with understanding your unique business and goals they will work directly with you and your Mesirow…, Next steps, As with any decision relating to your financial well-being your advisor can help to work through these factors to determine an appropriate TPA for you and your company The goal of using a TPA is not to add to the complexity of your plan rather to let you get back to what matters your work and your employees  If you’d like to learn more about how a TPA could help your unique situation contact your…, Published February 2025