FX: Managing Global Currency Risk is an older book of information about the foreign currency exchange market, originally published in 1997, but it is still a valuable resource containing a wealth of information that is just as relevant and applicable today as it was over a decade ago. This is the case because the topics and discussions presented focus on foundational subjects and aspects of the foreign currency exchange markets that remain substantially constant over time.
The book consists of contributions from a range of separate authors discussing a range of different topics, all of them collected together and arranged in an effective manner by author and editor Gary Klopfenstein. His approach is solid, yet uses enough unique perspective and arrangement to make the collection an overall very interesting read. The topics included in FX: Managing Global Currency Risk are relevant and appropriate for a range of readers with a range of backgrounds and experiences in the foreign currency exchange market.
FX: Managing Global Currency Risk discusses some of the basics of foreign currency exchange, including currency derivatives, currency futures, currency markets, central banks, hedge funds, trading speculatively, option strategies, and both fundamental and technical analysis. Author Klopfenstein does a very good job of bringing together papers that offer solid insight and information in these areas. Once the basics are covered, Klopfenstein moves into two additional sections, one focused on the needs and interests of institutional investors and the other focused on the needs and interests of corporations looking for effective strategies to manage their ongoing currency risks.
Range of topics and points of interest
FX: Managing Global Currency Risk covers a range of topics and points of interest, specifically looking at strategies for effective risk management, strategies for maximizing profit in the foreign currency exchange markets, and such. Among the topics examined in this book include:
- Important opportunities in the foreign currency exchange markets and how to recognize their key characteristics
- Effective and appropriate application of technical analysis and fundamental analysis when trading in the foreign currency exchange markets
- Common (and some not-so-common) strategies and approaches to use currency options and currency futures successfully and profitably
- The critical importance of and strategies for executing effective risk measurement and long term risk control
- Understanding and appreciating hedge funds and central banks, for the purpose of capturing the truly critical importance of these entities
- Examination and discussion of corporate risk management related to the foreign exchange markets, presented in the form of excellent case studies
While many of these topics are examined and discussed in a huge number of other books and publications, what sets FX: Managing Global Currency Risk apart is how thoroughly they are covered and just how easy it is to read and understand the content as it is presented.
Klopfenstein is especially qualified to collect and put together the contributions in this book because of his extensive background and experience in the foreign currency exchange markets. He is the founder, president, and director of several highly successful companies dealing in aspects of the foreign currency exchange markets, including GK Investment Management, GK Risk Management, GK Capital Management, and GK Software Development. He has also written and contributed to numerous additional publications, including magazines, books, and other content applications intended to expand the knowledge of foreign currency exchange market participants.
A closer look at the book’s discussions and topics
FX: Managing Global Currency Risk covers many of the topics you would expect in a book on foreign currency exchange markets as well as a few you might find unique or unexpected. It can best be described as a collection of information and contributions covering a range of foreign currency exchange market strategies, discussed from both practical perspectives as well as theoretical perspectives. The reader will find interesting and useful discussions of hedging instruments ranging from the exotic to the most basic; approaching currencies from the perspective of treating them as asset classes; understanding and executing effective strategies for overlay; the most critical and often overlooked tax issues and accounting issues for the corporate entity; and much, much more.
Although it is a collection of contributions from other authors and experts, Klopfenstein does an excellent job of bringing together various perspectives and writing styles in a way that is extremely approachable and readable. For instance, the organization of information alone is a good example of the thought and effort that Klopfenstein has put into the collection and construction of FX: Managing Global Currency Risk. This is evident in his decision to divide the book into three distinct sections, each with a clear purpose and theme. The three sections are as follows:
Part 1 – Overview of the Foreign Exchange Markets: Instruments, Participants, and Strategies – This section is both a solid introduction to the basics of foreign currency exchange market trading and an excellent discussion of the more advanced strategies and approaches that will appeal to the more experienced participant or observer of the foreign currency exchange market.
Part 2 – Currency Risk Management for Institutional Investors – This section is somewhat misleading in its title because it contains a wealth of information that is of interest and use to all types of investors, not just those with an institutional focus. Although the specific discussions and strategies presented are of course institutionally focused, the broader insights and lessons contained in this section are definitely useful to all types of investors as background, foundational, and explanatory discussions.
Part 3 – Currency Risk Management for Corporations – This section also contains a huge amount of information that all kinds of investors will find interesting and helpful. It is weighted heavily toward the informational needs of corporations (as you might expect from the section title) as they design and execute their risk management strategies for foreign currencies. Within this more focused discussion, however, there are plenty of useful nuggets of information and foundational insights that a wide range of investors will find useful and of tremendous value.
It is not at all unusual for authors to divide their books into sections such as this, but Klopfenstein is particularly successful because he has done such an excellent job of selecting the right contributors and the right materials to make each section interesting, informative, and widely useful for the reader. For this reason, FX: Managing Global Currency Risk is a book most people interested in the foreign currency exchange market will find enjoyable and educational at the same time.
Final thoughts
FX: Managing Global Currency Risk is an excellent collection of contributions from a wide range of experts and scholars whose work comes together to provide the reader with a terrific resource of information. The individual contributions are well written and the layout of the book itself is quite well organized and well designed. This is particularly helpful for the reader who is more of a novice in the foreign currency exchange market but also preserves the more in depth and detail content that is so helpful to the reader with a broader or deeper background in the foreign currency exchange market. The author, Gary Klopfenstein, puts forth an excellent effort to gather the right selection of contributions and contributors to meet the needs of a wide range of readers.
Because it is so suitable for a wide range of readers, FX: Managing Global Currency Risk stands out as one of the best of its type available in bookstores and online. It is an excellent resource for learning more about the basics as well as the more advanced strategies and approaches to effectiveness and profitability when trading on the foreign currency exchange markets. Lots of books make the attempt to achieve this kind of balance and success, but FX: Managing Global Currency Risk is one of the relative few that actually succeed in attaining this goal.
FX: Managing Global Currency Risk is overall a terrific resource for all levels of investors, traders, and observers of the foreign currency exchange markets. It brings the subject to life in a way that is interesting without being “fluffy” or otherwise too vague to be particularly useful to anyone. On the contrary, readers have the opportunity to explore a number of key aspects and approaches to trading on the foreign currency exchange markets without sacrificing any of the important details or specifics necessary to provide appropriate value to the content. This is an unusual combination to find, but FX: Managing Global Currency Risk does it with great skill and clarity.
Overall, there is no reason not to recommend FX: Managing Global Currency Risk to readers of all levels. The information it contains and the way in which it is presented combine to make it an excellent addition to your library, regardless of whether you are a novice in the foreign currency exchange market or have a strong background and experience level in the foreign currency exchange market.