The Application Of The Couple Hedge Model On Foreign Exchange Rate Market

After the collapse of the Bretton woods system in 1973, foreign exchange market exchange rate fluctuations and become more frequent and severe. In recent years, the changing currency fluctuations become more intense. On July 21,2005, the Chinese government triggered the reform of the RMB exchange rate. With reference to a basket of currencies, RMB exchange rate allows to float in a certain degree. In the new currency arrangement, enterprises are facing more exchange rate risk. In this context, enterprises also need to improve the ability to evade the hedging of foreign business activities of risk. Due to long-term exchange rate policy, the exchange rate risk management awareness of our enterprise is not high. But with the reform of the exchange rate, the problems of Chinese enterprises in risk management become more obvious.Therefore, we put forward couple hedging model. We hope this model could provide some new ideas for enterprises in foreign currency futures market to manage the risk. This model is based on exchange rate risk and the theory of hedging. We review these two theoretical bases at first. Based on theory of enterprises in our country we analysis the risk status and existing problems in exchange rate risk. Although problems are very much, we still put forward ideas and solutions. We use three examples to demonstrate the operational mechanism, in order to achieve the model can be more system and true in readers.Based on the theory of literature research, we use investigation method, the quantitative analysis method and the method of model example. The model of innovation is one of our innovative points, some methods for speculative futures exchange hedging to evade the risks. Another innovative thinking is that our model is all according to the price movements without forecasting.