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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (70744)	10/31/2007 8:47:00 AM
From: sea_biscuit	Read Replies (1) \| Respond to of 116555

If the rate is guaranteed and you want to pay later at the current exchange rate you simply buy the amount of currency to pay for the room. There is no currency exposure. Wha..??!! You made my point! That is exactly what I have been saying - if you want to pay later at the current exchange rate, you have to buy and keep in reserve, the amount of currency that is needed. By doing so, you are exposed only to pricing risk. If you hold money in any other currency, then you are exposed to pricing risk AND currency risk.