Alternative hedging for European exporters

PROBLEM: European exporters have to face the problem of euro appreciation against emerging markets currencies. From a technical point of view, a major correction seems unlikely. The illiquidity of those currency pairs prevents doing reverse barriers or digital strategies to reach customer targets. An alternative is to use the volatility and liquidity of major currency pairs to solve the situation.

Solution: Let’s take the example of a European exporter exposed to Hong Kong dollar depreciation