GLOSSARY

Hedge

Hedging is a method used in finance to reduce the risk of being exposed to a particular security. Historically, gold has been an effective hedge against currency risk as it is considered a relatively stable store of value. Essentially, to hedge is to protect yourself against risk, often by investing in another asset that is inversely correlated with the one that you are exposed to.

Hot Money

Hot money describes an influx of speculative investments from one financial market to another in order to take advantage of higher interest rates.

Hawk

A hawk is central banker or economic advisor whose policies is primarily concerned with interest rates. Hawk’s policies are not as concerned with economic growth as they are with keeping inflationary pressures in control and tend to be in favour of keeping interest rates relatively high in order to keep inflation low. Policies or statements made to this effect are described as being ‘hawkish’’.