Tag Archives: currency hedging
Gold Breaks Out to a New All-Time High as the U.S. Dollar Drops
Despite the drop in volatility in many asset classes over the summer, some broke through key support and resistance levels. The S&P GSCI Gold (TR) was one of them, reaching a new all-time high of USD 1,056.83 on Aug. 6, 2020, eclipsing the previous high from the summer of 2011. The underlying gold futures had…
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The Mexican Peso: Liquid, Volatile, but Can We Hedge?
With oil prices falling and the spread of the COVID-19 pandemic, volatility is back in action. In Latin America, Forex valuations are a key barometer. Local currency depreciation is one of the most common reactions to uncertainty (see Exhibit 1). This blog highlights the recent volatility in the Mexican peso and possible ways to mitigate…
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Japanese Market Participants Accessing U.S. Treasuries (Part 2)
Japanese market participants looking to access U.S. Treasury bonds or any other international bond market may need to be aware of fixed income risk and currency volatility. Depending on their investment view, Japanese market participants may choose to hedge currency risk or remain unhedged. Either way, market participants may be exposed to additional returns or…
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Navigating Brexit
Despite some warnings from volatility gauges, the market had “priced in” a vote for remain from the UK’s population. This has made for some dramatic headlines, and large movements since the vote to leave the EU was announced. As the market scrambled to make sense of the political chaos, three key themes have emerged from the…
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The Impact of Currency Exposure: Evidence From the Performance of Actively Managed Global Equity and Bond Funds
In the past 18 months, currency hedging has become one of the hottest topics in the investment community. As the U.S. economy strengthens and decouples from the rest of the developed and emerging economies, and as there is unprecedented quantitative easing by the Bank of Japan and the European Central Bank, it is nearly inevitable…
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Currency Wars: Pandering to Debase
So far this year, we have seen a ravenous interest from U.S. investors in currency-hedged equity exposure. Currency risks have increased; currency volatility is on the up: The reasons behind these trends can be understood in part via the nature of human psychology and power, and the reality of politics. Consider yourself, for a brief…
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