Business English Lesson – Advanced Level''''s archiveCurrency Valuation and Strategic Hedging ppt

Business English Lesson – Advanced Level's archive Currency Valuation and Strategic Hedging 1.. The US dollar's current weakness is making hedging risk very .... However, an active and

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