RE:RE:RE:RE:Fx HedgingSunshine and Dudsywow, I agree that we cannot forcast how currency will trade and as a global company this gives us additional risk. Although I can not speak for him, I think that Mr. Landry (the CIBC analyst) was more concerned at Euro / Pound hedging (since AMCo's revs are in pounds but costs are Euros) as this is what would pressure margins. There isn't that much room there for error in contrast to the higher margins available in the N. American market. That was what kind of jumped out at me when Martin asked Kreppner "But if Euro weakens or strengthens against the pound that would put pressure on your margins, right?" Kreppner replied: "That would .... but that's not something that we are currently actively hedging at the moment." Having said this, I'm sure fdfd will keep us appraised of the share price as it correlates to the Euro weakness or strengthening against the pound. I'm sure that the algos trading CXRX probably have this programmed :)
dudsywow wrote: sunshine7 wrote: Much of cxr debt is denominated in be pounds. A devalued pound is beneficial in that regard is it not?
Their interest payments in pounds are less than their revenue in pounds, so a devalued pound is net detrimental.
However, nobody knows long-term how any currency will trade. Anyone who thinks they can forecast this is deluding themselves. You just need to understand that owning CXR gives you some exposure to GBP and some US$. Within a diversified portfolio, thats not a bad exposure to have.