Wednesday, July 12, 2006
Currency Insurance
Currency Insurance enables you to pay a premium towards fixing a pre-approved exchange rate at a particular date in the near future. Incase your dollar goes up by that pre-decided date, you may have the assurance that you may still buy or sell your dollars at that exchange rate. But on the other hand if your dollar value falls, you're not obliged towards your Currency Insurance and may still get the benefits of a lowered dollar value. Hence you are always in a win-win situation. Therefore its worth saying that your currency insurance might protect your returns from a higher dollar value and also benefits with a fallen value !
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