US policy uncertainty stalls North American investment

Policy uncertainty is delaying investment, dollar volatility is reshaping supply chains, and FX risk has moved from the treasury desk to the boardroom. Here is what senior finance leaders across the US and Canada told us.

Key takeaways:

• 90% of North American corporates have delayed investment decisions in the past 12 months because of US policy uncertainty, and 39% say the delay has been significant.
• 82% still hedge forecastable currency risk in 2026, down from 91% in 2025 but in line with 2023 and 2024. Among non-hedgers, 72% are now considering hedging — the highest level in four years.
• 81% have changed sourcing or manufacturing strategies in response to dollar volatility, including 32% that have significantly altered their supply chain.
• Federal Reserve and Bank of Canada rate policy is the single biggest external influence on hedging strategy, cited by 38% of firms.
• The mean increase in hedging costs was 52% in 2026, down from 76% in 2025, and almost every respondent is now exploring AI in their FX operations.

 

The impact of policy uncertainty on North American corporates

Policy uncertainty is feeding directly into capital decisions as 90% of North American corporates have delayed investment decisions over the past 12 months because of US policy uncertainty, and 39% describe those delays as significant.

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.

More broadly, respondents identified Federal Reserve and Bank of Canada rate policy as the biggest external influence on FX hedging strategy (38%), ahead of US tariffs and trade policy (33%) and geopolitical tensions in the Middle East (28%).

Dollar volatility is also producing mixed outcomes on FX returns, almost three-quarters of firms (72%) say the impact has been positive, while 19% report a negative impact.

 

Are North American corporates still hedging FX risk in 2026?

Yes — 82% of North American corporates still hedge forecastable currency risk in 2026, down from 91% in 2025 but broadly in line with 2023 and 2024. The fall looks like recalibration against an uncertain backdrop rather than a retreat from hedging, and for those still in, cost pressure is real but easing: the mean increase in hedging costs was 52% in 2026, down from a 76% rise in 2025, with 8% reporting costs have more than doubled.

The strongest evidence that the dip is temporary comes from the firms sitting on the sidelines. Among corporates that do not currently hedge, 72% are now considering doing so given market conditions — the highest level in the four years MillTech has run this survey.

Among those still holding back, the most common reason is that capital is better deployed elsewhere (35%), followed by burdensome hedging infrastructure (30%), minimal exposure (22%) and cost (13%). Notably, infrastructure, not economics, is the second-largest barrier, which points to an operational fix rather than a strategic objection.

 

How are North American corporates modernising FX operations?

Online user interfaces are now the most common way to instruct FX transactions, used by 55% of firms. More striking is email, which has surged to 50% — more than double the 24% recorded last year — while phone use has risen to 33%.

Visibility is emerging as the new bottleneck as lack of real-time data and transparency is the top operational challenge, cited by 28% of respondents, followed by getting comparative quotes (26%) and onboarding liquidity providers (26%).

To address these challenges, corporates are increasingly looking to automation. Price discovery is the top FX process being considered for automation (48%), followed by risk identification (43%) and trade execution (43%).

AI is also moving up the agenda, with almost every respondent now exploring its use in FX operations. Process automation and risk management are among the leading use cases, but scaling AI safely remains a challenge. Respondents cite model risk and governance concerns (19%), cyber and privacy concerns (18%) and integration (14%) as the biggest barriers to implementing AI.

 

 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.

Eric Huttman, MillTech CEO

 

To find out more about North American corporates’ evolving FX strategies, the impact of policy uncertainty and dollar volatility, and the shift toward automation and AI, download the North America Corporate FX Report 2026.

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