Identify the Strategic Currency Management Approach

During a recent investment committee meeting, the chief investment officer (CIO) discussed the importance of managing currency exposure for the firm's international investments. The CIO outlined two approaches to currency management: strategic and tactical. The strategic approach focuses on long-term currency forecasts and aligns with the overall investment strategy, whereas the tactical approach involves making short-term trades based on short-term market movements.

After outlining these approaches, the CIO asked the team to identify which currency management approach emphasizes longer-term currency trends rather than short-term fluctuations.