How to hedge the $USD?

with forex you can choose the proper amount in case its not an exact number of the futures contract
think of this way if you hold $100,000 and dont live in the US your taking huge position in the fx market without any reasoning behind the 'trade'. by buying cad futures(or forex) for an equivalent amound yor merely offseting that 'gamble'. you never win or lose due exchange rate movements, you will stay net neutral.(there is the cost of carry a short usd but bernanke is working on this one)
 
The way i would look at is, with your $200K trading account in the US, you are effectively :

LONG 2 lots USDCAD spot currency

To hedge, just put the opposite trade on with an FX broker i.e SHORT 2 lots of USDCAD.

Any further weakness in your US$ trading account will be off-set by the money you make with your hedge.
If the US$ rebounds and strengthens, your hedge position will lose money but your trading account will be worth more CAD.
 
I can go ahead and short the exact amount of USD/CAD in interactive brokers but I will be charged interest every day.... won't that eliminate much of the hedge?
 
If the previous posts about $1.50 for every $100k short is true then that's a very small price to pay for this hedge. I don't understand why you say the leverage would land out hurting though?
 
Quote from sim03:

About $1.50=C$1.50 a day per 100K lot. Less than any spread or commish.
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Could you please explain this - I don't know much about how one goes about hedging (I assume this is with futures contracts?), so I'm curious as well.
 
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