Hedging means that one investment deliberately reduces the risk of another investment. This is a way to reduce business risks while still making profits from investment. General hedging is to conduct two transactions at the same time, both related to the market, in the opposite direction, with the same amount and breakeven.

As the exchange rate rises, so does the interest rate.

The exchange rate indirectly affects the interest rate. The influence of exchange rate on interest rate is mainly caused by the unbalanced change of international payments. The balance of payments mainly consists of two parts: first, the current account balance; The second is the balance of capital projects. If a country has a long-term balance of payments surplus, the foreign exchange supply will inevitably exceed the demand, and the local currency will appreciate externally; The appreciation of local currency will generally inhibit exports and stimulate imports, thus expanding domestic commodity supply, stabilizing domestic prices and forcing interest rates to fall; On the other hand, in order to stabilize the exchange rate of the local currency, the country will inevitably convert the balance of payments surplus into foreign exchange reserves. When foreign exchange reserves increase, local currency will increase, money supply will expand and monetary policy will be relaxed, thus forcing interest rates to fall.