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Exchange rate risk can be hedged. In simple terms, the hedging...

  1. gimmegimme
    1,925 Posts.
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    13/09/22
    19:24
    Post #: 63679101
    Exchange rate risk can be hedged. In simple terms, the hedging cost is the interest rate differential between the two currencies plus a small risk premium.

    I haven't done any currency hedging for quite a few years so I'm a bit out of touch. But I'd be surprised if an AUD/USD hedge currently costs more than 1% p.a. That's nothing compared to the 66.8% p.a. profit scenario I posted about.
    RAP Price at posting: 20.5¢ Sentiment: Hold Disclosure: Held
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    lightbulb Created with Sketch.  Great analysis
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