Currency Risk and Hedging in International Bonds

Study how exchange-rate movements affect returns and how investors hedge currency exposure.

In this section

Exchange Rates and Bond Returns
Understand how currency movements alter the local and home-currency return of international bonds.
Currency Hedging Techniques
Compare the main instruments used to hedge foreign-currency exposure in bond portfolios.
- Forward Contracts for Currency Hedging
  Review how forward contracts are used to lock in exchange rates for future cash flows.
- Currency Swaps
  Understand how currency swaps exchange principal and interest streams across currencies.
- Currency Options
  Learn how currency options provide asymmetric protection against unfavorable exchange-rate moves.

Revised on Thursday, April 23, 2026