Long term currency swaps
Of course these are in two different currencies.
This is a structured way in which to hedge currency risk.
It should now be clear that there are many ways in which foreign currencies are traded in, with a large range of different vehicles and methods to mitigate exposure from the large business downwards.
Some options are intuitive and make sense whilst others require a little thought and consideration to fully understand.
One thing is for sure, there are an ever growing number of sophisticated products out there for foreign exchange and with more and more international trade between more and more countries, this is only ever going to grow, and it will be interesting to see what sort of products will be brought online to cover the riskier currencies of the future.
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