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A foreign exchange cover, or currency hedge, is a financial strategy used to protect against potential losses due to fluctuations in currency exchange rates. It typically involves using instruments like forward contracts, options, or swaps to lock in exchange rates for future transactions. This helps businesses and investors manage risk associated with international operations and investments, ensuring more predictable cash flows. By mitigating currency risk, a foreign exchange cover can enhance financial stability and planning.

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2mo ago

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