A Mexican importer invoices goods in EUR and expects to pay EUR 4 million in 3-months. A 3-month forward contract is available at a EURMXN rate of 24. How should the Mexican importer construct a forward market hedge to manage the FX exposure?

• The Mexican importer takes a short position in the forward contract of EUR 4 million at the 3-month forward EURMXN rate of 24.
• The Mexican importer takes a long position in the forward contract of EUR 4 million at the 3-month forward EURMXN rate of 24.