| Currency hedging is both an art and a science. It is an approach that has the purpose of managing the degree of risk that can present itself when engaged in a strategy using foreign investment. The currency's hedging structure would provide a buffer to compensate for fluctuations in the relative value of the currency type used in the investment.
WIth this buffer, it minimizes the exposure of the investor for the sudden shifts in the market to be able to obtain a reasonable return on the investment even if the currency declines or devalues during a given period...............................................Full Article: Source
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