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please explain HEDGE/ DON'T HEDGE DECISION in plain terms

Hi guys,

need sumone to please explain the HEDGE/ DON'T HEDGE DECISION in plain terms:
how best to decide if the foreign currency should be hedged or not.

thanx a million!

For currency appreciation, if your expectations of foreign currency appreciation are greater than as predicted by interest rate differential- do not hedge and vice versa.

For currency depreciation, if your expectation for foreign currency depreciation are less than as predicted by interest rate differential, do not hedge and vice versa.

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