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| You are correct Palm. The index charts the usd to a basket of 6 other fiat currencies. Euro, pound, swiss francs, canadian dollar, yen and something else. (cannot recall). it omits many other currencies like China,s Yuan, south american currencies, peso etc.. It does allow hedging via the index although not a perfect hedge. I believe it was created after the dollar was taken off the gold standard way back when. Probably why it didnt include china and others as there was very little trade with them back then. I have a friend of mine that imports window products from China and he tries to directly hedge the dollar/yuan. i need to ask him the mechanism that he uses! | |
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