by Stephen McPhie, CA
Partner, RSD Solutions Inc.
Do you have Euro exposures? Are you worried about the Euro exchange rates? Are you concerned that volatility will also affect other currencies, perhaps through flight to quality?
As a result, are you scrambling around looking for additional hedges? If you are, then you should consider if what you are doing is more speculation than hedging. You should also consider a thorough review of your hedging policies and practices. A well-conceived hedging policy should be designed precisely for volatile situations such as this and to allow time for longer term adjustments to be implemented.
That is not to say it shouldn’t be constantly reviewed and updated. It should be. However, it should not be prone to significant, sudden and little considered changes in times of volatility.
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