Inventory stockpiling to hedge fluctuations, or even better, foreign currency investment reserves, are very effective hedging tools, however it is a risky business which can also have a negative effect on the bottom line if the account is large compared to the bottom line P&L.
I operate a business that requires constant hedging against the AUD/NZD, and hedge based on a consistant amount monthly, hedging flows are dictated by when rates fall above or below the 5 year moving average. I also factor in long term economical direction of NZ and AU (sentiment towards NZ has largely been negative for the past 5 years, weakening the value of the NZD). Having almost all long term assets in AUD has generated aignificant benefit for the business since 2017.
In NTD's case with the US dollar falling, it may be time to start looking at either securing a supply of materials that exceed demand, or if they believe materials costs will fall (goint against the Goldman Sachs opinion for 2023) then having a supply of USD to buy if and when price to supply does fall.
NTD Price at posting:
55.0¢ Sentiment: None Disclosure: Not Held
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