Say I have £100,000 and I physically convert to USD (put it in a US bank account) but, I think the USD will continue to weaken so if I want to preserve the current exchange rate I would "BUY GBP/USD 100K" position.
Physically I have sold GBP100k, but on forex I have bought GBP100k.
Would this create a hedge so if I withdraw from my bank back to GBP at any time and close the forex position the difference between the two will be offset?
Physically I have sold GBP100k, but on forex I have bought GBP100k.
Would this create a hedge so if I withdraw from my bank back to GBP at any time and close the forex position the difference between the two will be offset?