Currency Hedging Between the US Dollar and The Chinese Yaun: A Lead Effect

Abstract

This study investigates currency hedging over a ten year period between the US Dollar and the Chinese Yuan. A brief review of hedging currency and risk management is provided. Several regressions are performed to determine if there are any variables that would be useful in predicting the future exchange rate between the US Dollar and the Chinese Yuan. The study is limited in the fact that it only examines hedging between two currencies. This study concludes that there are statistically significant variables potentially useful in projecting exchange rate fluctuations between the US Dollar and the Chinese Yuan.