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Guest post from our media partner Clear Path Analysis.

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An annual report bringing together asset owners, treasurers and asset managers to discuss how recent macro-economic events have shaped the market environment for foreign exchange hedging and created opportunities for foreign exchange as a return seeking asset.

Japan’s recent decision to bolster quantitative easing measures has bolstered once again the challenges asset owners and their managers’ face in effectively hedging FX risk. However, with a level of ‘normality’ returning to market cycles, sophisticated institutional investors are slowly turning their attention to their hedging mandates and examining ways in which to generate returns at a time of low yield in fixed income assets. With confidence in market cycles becoming more prevalent, currency investment strategies are also generating attention for their diversification, new source of returns and high liquidity qualities.

The FX Hedging & Investment, Europe report will bring together institutional asset owner groups, central banks and treasurers with their asset managers, to discuss the developments in standard hedging strategies and examine the merits of currency in a return seeking portfolio.

Key service and product providers this report is suitable for:

  • Currency, Multi-Strategy and Multi-Asset managers
  • Investment Banks
  • Brokers
  • Currency Exchanges
  • Trading Platforms
  • Technology Providers
  • Reference Data Providers
  • Investment Research Companies

Key issues the free report will discuss:

  • The macro-economic effects of recent quantitative easing measures
  • The role of currency in a return-seeking portfolio and how the past relates to the future
  • The rationale for a total hedging approach versus a partial active approach
  • Adopting a currency overlay strategy in a DC plan
  • Long-maturity currency hedging instruments
  • The rationale for adopting a long-term currency investment strategy and the benefits

One Response to “FX Hedging and Investment, Europe”

  1. fx trading

    First off, starting here on the Greater British Pound versus the US Dollar [GBPUSD]. Yesterday, we saw the market rallying higher into the 1.4600-level, the pink-shaded area that’s up here at the very top of the chart. And I made note yesterday during the Trade Room that if it stayed within and under that pink zone, specifically getting underneath it and underneath the 1.4600-level, we might look for an opportunity to go short and sell this currency pair.

    So, as you look down here at the very bottom of the chart, you could see that I am in a short from the 1.4600-level. The current market is sitting right around 1.4560, so we’re sitting about 40 pips of profit on the trade. Saw a few more pips a few minutes ago as it dipped back down here towards the 1.4550-level. But all in all, the open and close underneath the pink zone was what we were looking for in the Trade Room. An opportunity to go short there on the hold of resistance and target back down here towards the orange-shaded area for our first initial target.

    If it reaches there in the next few minutes or today, we’ll look for opportunity to close some of the profit on the trade. If the market becomes significantly bearish and pushes back under the orange zone – 1.4515 or so -, we’ll look for continued profit as we look for it to continue to fall, maybe all the way back down towards the 1.4400-level and the blue-shaded area at the bottom of the chart.

    The risk at this point is no risk. We have locked in with profit at five pips of profit because the market moved above 40 pips of profit. So, we’re locked in. Can’t lose on the trade. If it rallies back to the pink zone, I’d be cautious about getting back into it with the bullish momentum we saw earlier on in the week, but this was a decent opportunity here just to take some short pips on the way back down.

    Moving over to the New Zealand Dollar versus the US Dollar [NZDUSD]. Here, on this currency pair, it’s been kind of a waiting period here for this currency pair. We were looking for going short into the pink-shaded area. We saw the market push underneath the historical supports here, right around the 0.6745-level. Pushed underneath it. Settled out underneath there as resistance, so we took a short and so far, since taking that, it hasn’t really done a lot. It’s just kind of drifted back up in towards the 0.6765 or so level. Coming very close to our stop loss, but we were able to stay with it.

    Reply

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