Foreign exchange options and foreign exchange forward contracts. According to relevant public information, western countries hedge exchange rate risks in various ways. One of the most commonly used methods is to use foreign exchange options and foreign exchange forward contracts. Foreign exchange option is a financial instrument that allows buyers to buy or sell money at a certain price at a certain time in the future. This method enables buyers to lock in the currency price, thus avoiding the risk of future exchange rate fluctuations. A foreign exchange forward contract is an agreement to exchange money at a specific price at a certain time in the future. This method can also be used to lock the currency price, thus reducing the impact of exchange rate fluctuations. In addition, western countries also use other methods to hedge exchange rate risks, including currency swap agreements and foreign exchange swap contracts.