Quote:
Originally Posted by osmo
Every major Canadian operation that deals with USD$ extensively has US funds in a hedged account. Lessons were learned from the crippling 90s, no professional sports team in Canada these days is crying foul about the high USD$.
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My understanding about hedging is that it makes the US$ conversion rate predictable over a longer period of time, it doesn't necessarily improve it.
For instance, one might hedge their USD:CAD ratio at today's $0.75 USD:1 CAD. If the CAD dollar climbs to $0.85 USD, you're still buying US dollars at the old rate, same if the dollar plunges to $0.60 USD. It makes expenses more predictable.