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To: lin luo who wrote (145241)	10/19/1999 7:25:00 PM
From: edamo	Read Replies (1) \| Respond to of 176387

lin luo...ot ot ot...re: "currency hedge" it is common practice and easily executed, it is the only way a fixed price can be assured. the futures contract is not purchased as a speculative instrument, but as a lock down of currency conversion on date of contract or prior to same. e.g. if a japanese heavy industry buys a gas turbine, and the purchase price is in us dollars, with a delivery of perhaps eighteen months, they would buy a dollar futures contract at the current yen equivalent. this guarantees no escalation via currency fluctuation until delivery. it can be in tandem with a letter of credit. most major international banks do this on a regular basis. currency is now considered a commodity. most forget that the primary function of a futures commodity market is to allow the actual buyer and sellers of commodities a stable or known price for future delivery. unfortunately, the markets have been tainted by speculators, which cause the volatility....remember at some point the underlying commodity is delivered to a buyer who needs same. oil about the only commodity that is transacted solely in us dollars. for this reason, weak dollar usually is in unison with high oil price. the price of oil is adjusted by the producing nations based on dollar strength. this is an important fact that the original opec agreement set forth that no one outside of the oil business remembers. typically strong yen buys more oil when converted to weak dollar. this can also be seen as the reason the saudi real floats with the dollar... hope i answered you concisely!....ed a.