Foreign Exchange risk management means that asset holders prevent, avoid, transfer or eliminate risks in operation through risk identification, risk measurement, risk control and other methods, so as to reduce or avoid possible economic losses.
To realize the profit maximization under certain conditions of risk or the risk minimization under certain conditions of income.
When dealing with the micro economic interests of enterprises and departments and the macro interests of the country as a whole, the enterprise sector usually tries to reduce or avoid the loss of foreign exchange risk as much as possible, and then transfers it to banks, insurance companies and even the national finance.
In the actual business, the interests of the two should be combined as well as possible to jointly prevent risk losses.
For different types of risk losses and different transmission mechanisms, we should adopt different applicable methods to classify and prevent them in order to be effective, but we should not mechanically copy them.
For the risk of trade settlement, we should take the selection of pricing and settlement as the main precaution method, supplemented by other methods;
For the risk of bond investment, we should take various measures to protect the value.
As for the risk, we should focus on the diversification of the reserve structure and carry out foreign exchange supplement at the right time.
From its practical application, this principle includes three aspects :(1) make the risk disappear;
(2) Transfer the risk;
(3) Avoid losses and gain from risks.
The latter, in particular, is the ideal goal that people pursue.
The dollar‘s continued decline helped lift gold, but a rebound in U.S. and European stocks limited gains, keeping an eye on U.S. and European PMIs.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.