Aussie calls offer no worries hedge
Problem: A corporate client has an ongoing long AUD short USD exposure and has happily ridden the substantial AUD appreciation of the last six months. The AUD/USD pair reached a three-year high just below 0.6200 in early March 2003, but the client was perturbed by the increasing possibility of a reversal of this trend, due partly to the much talked-about defence of option barriers at 0.6200. Given the current AUD interest rate premium over the USD and relatively strong economic fundamentals, the
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