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This futures hedging example involves using currency futures to protect against a potential decrease in the value of the pound sterling. In this scenario, an American with 10 million pounds in a British bank plans to transfer the money in September. To hedge against the risk of the pound declining, they sell pound futures through a short hedge at a futures price of 23 cents per sterling. This strategy aims to mitigate the impact of currency fluctuations on the value of the funds when converted to dollars.