Business English Lesson – Advanced Level's archive Currency Valuation and Strategic Hedging 1. The US dollar's current weakness is making hedging risk very for corporates in North America, while their counterparts in Europe don't have the same advantage. abundant attractive egregious elusive 2. However, an active and strategic approach to hedging means that Europeans should not be , Didier Hirigoyen exhorts. determined deterred detracted distracted 3. The current weakness of the US Dollar major currencies has revived the debate around net investment hedging as well as earnings translation risk. and re versus with 4. Although North American companies' hedging opportunities are now generally benefitting from favourable market conditions, European corporations may not have to away from managing these risks. balk flinch leap shy 5. A solid currency valuation assessment combined with a structured hedging framework can lead to a successful programme; this approach however a slightly more dynamic methodology than is common in the corporate world. commands demands regulates stipulates 6. Between internal policy constraints and accounting regulation, most companies have chosen to be mostly passive, implementing hedging strategies in a systematic manner or not at all, but rarely into consideration market conditions in the decision making process. bringing drawing placing taking 7. While it is fair for companies to state that they are not involved in the currency market to 'punt' on the direction of exchange rates, it is also fair to say that hedging should not be done in either. a limbo an instant a trice a vacuum 8. While understanding the mechanisms and characteristics of the FX market is key to a sound hedging policy, remaining aware of currency valuation and including it in the risk management process can add value to a firm as a last resort at a glance in the long run on the scorecard 9. The PPP currency valuation model, modified to reflect the assumption that a currency pair has, on average, traded at fair value over the 20 years preceding the measurement point, offers some into the long-term behaviour of exchange rates and their tendency to mean- revert on an inflation adjusted basis. insight oversight overview purview 10. For example, the EUR/$ exchange rate has, over the past 14 years, in a broad band around the PPP implied rate. glided hovered soared stooped . Business English Lesson – Advanced Level's archive Currency Valuation and Strategic Hedging 1. The US dollar's current weakness is making hedging risk very for. world. commands demands regulates stipulates 6. Between internal policy constraints and accounting regulation, most companies have chosen to be mostly passive, implementing hedging strategies. say that hedging should not be done in either. a limbo an instant a trice a vacuum 8. While understanding the mechanisms and characteristics of the FX market is key to a sound hedging