Hedging Currency Risk with Derivatives

XYZ Corporation, a U.S.-based exporter, anticipates receiving a payment of €1 million in six months for goods sold to a European customer. With the current exchange rate at 1.10 USD/EUR, XYZ is concerned about potential currency depreciation against the euro, impacting its revenue when the payment is converted to dollars. To hedge this exposure, the CFO considers three derivative strategies: an outright forward contract, a currency swap, and a zero-cost collar. Each strategy has varying implications for cash flow, flexibility, and potential upside or downside.

Which hedging strategy should XYZ Corporation choose to effectively mitigate its currency risk while retaining some upside potential?