Dynamic currency hedging

13 Apr 2018

Currency is conceptually easy to understand and it is therefore easy for a novice to form a directional view. It is also exciting as it reacts to almost everything – economic news, political news, wars, natural disasters, facts and rumours. However, with so many events creating turbulence in currencies, is it any surprise the ultimate direction of a currency turns out to be more difficult to predict than expected?

In this research piece, we discuss our Dynamic Currency Hedging (DCH) solution – a risk-controlled alternative to passive currency hedging. DCH is a systematic trend-following strategy seeking to protect portfolios from adverse currency movements when protection is needed the most ie when the totally unexpected happens.

Our DCH solution has been managed by the Macquarie Currency team for almost 25 years, and has a strong track-record of delivering results. Read on to learn how DCH’s systematic nature has helped clients benefit from currency trends, while simultaneously protecting them from the liquidity issues that can arise when the AUD falls. 

Download the full article