Currency Management Strategy Selection

As a portfolio manager focusing on currency management, you are tasked with developing a strategy that will enable your institutional client to efficiently hedge against currency fluctuations in their international investments. The firm has both short-term exposure due to imminent cash flow needs and long-term commitments in several foreign markets.

You are considering two distinct approaches: a strategic management approach for long-term currency exposure and a tactical management approach for short-term fluctuations. Your goal is to accurately assess which approach is most appropriate given the client's investment horizon and the nature of their currency exposure.