LBO in Foreign Currency

If I have all three statements in local currency, when calculating returns in USD, which forecast FX do you use?
Do you use estimated broker research spot rates for each year or the forward curve?
I've been thinking about this and can't make up my mind.
Thanks!

 
  • Internal macro research (if your firm produces one)
  • Bloomberg consensus (or any other analyst consensus - but I would avoid using forecast from only one broker)
  • Take today's rate and grow it with CPI (but you need CPI forecast - but it is readily available from dozens of sources for most countries)
  • Take some very pessimistic view (i.e. local currency depreciation by 5 or 10 percent per year depending on the history) and call it conservative scenario with "potential FX upside"
 

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