How Currency Hedging Works

FX hedging utilizes financial instruments known as derivatives to manage the risk of currency fluctuations. Derivatives are contracts that allow the user to establish in advance the precise price they will pay for a currency transaction in the future.

The Canadian economy is closely linked to its neighbor to the South, and the Bank of Canada has kept interest rates nearly equal to those in the US. This has resulted in a recent period of low volatility in the USDCAD pair.

Global companies are faced with the challenge of managing the effects of currency market movement on their business. International businesses utilize a variety of products and strategies to minimize losses due to FX fluctuations.

The peso has been the FX star for two years. Why the trend might persist in 2024.

The Fed's rate hike history and its impact on foreign currency markets. How central bank policy affects the US currency in global FX markets.

Future moves in interest rates will be lower according to Fed Chair Powell's comments in December 2023's Fed meeting. Read about what a fed rate pause means on the DXY forecast.

Europe's economy has slowed under high interest rates in 2023, & is likely to have additional challenges in 2024. Here is Pangea's technical EURUSD forecast & analysis.

Managing FX risk starts with understanding the factors that drive currency movement & volatility. Read more about the factors that affect global currencies here!

Javier Milei suggested that Argentina should ditch the peso, eliminate the country's central bank, & use US currency instead. Read more here on Argentina & dollarization.