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Strengthening

• Is a hedging or risk management term used to describe the relative gain of value between the underlying market and the hedge vehicle. It suggests that the cash or spot commodity or market is becoming more valuable relative to the futures or forward as defined by the basis.

 
 Embedded terms in definition
 Basis
Cash
Commodity
Forward
Futures
Hedge
Hedging
Market
Risk management
Risk
Underlying
 
 Referenced Terms
 Deflation: Deflation Is the economic and financial phenomenon which represents declining prices particularly for goods and services. It can occur in countries with Strengthening currencies. Here, the cost of imports would tend to decline. It can also occur in countries which are experiencing depressed economic conditions. At such times of declining output, sales of assets generate considerable downside pressure on prices. Deflation can be viewed in monetary terms when the money supply is constracting to such an extent that one unit of currency purchases increased amounts of goods and services.

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