Hedging Currency Risk with Futures and Forwards

ABC Corp is a multinational company with significant exposure to foreign currency exchange rates due to its operations in various countries. The CFO has identified a need to hedge against the risk of the Euro depreciating against the US dollar, which could negatively impact its overseas business profits. ABC Corp is considering the use of futures and forwards to manage this risk.

A finance team recently conducted a cost-benefit analysis of using a Euro futures contract versus a Euro forward contract. The analysis revealed that while futures contracts are standardized and can be traded on an exchange, forward contracts offer more flexibility in terms of contract size and settlement dates. They also noted that futures contracts require daily margin postings, which might affect cash flows.

Given this situation, which of the following strategies should the CFO implement if he prioritizes cash flow stability and tailored hedging?