Note 38.3  Foreign currency risk The Consolidated Entity is exposed to foreign currency risk arising from transactions entered into in its normal course of business  and as a result of its investments in foreign operations. Movements in foreign currency exchange rates will result in gains or losses in  the income statement due to the revaluation of certain balances or in movements in the foreign currency translation reserve due to  the revaluation of foreign operations.  In order to manage this risk, the Consolidated Entity has a policy that non-trading foreign currency exposures are appropriately  hedged unless specifically approved by RMG, and trading foreign currency exposures remain within trading limits set by RMG.  Forward foreign exchange contracts, or borrowings in the same currency as the exposure, are designated as hedges under  Australian Accounting Standards and offset movements on the net assets within foreign operations and are transferred to the  foreign currency translation reserve.  Responsibility for monitoring and managing foreign currency exposures arising from transactions rests with individual businesses  which will enter into internal transactions as necessary to transfer the underlying foreign exchange risk to our trading businesses.  Any residual foreign exchange risk residing in non-trading divisions is included in the internal model capital calculation by RMG, with  the exception of specific investments in core foreign operations as discussed below.  The hedging policy of the Consolidated Entity is designed to reduce the sensitivity of the Consolidated Entity’s regulatory capital  position to foreign currency movements. This is achieved by leaving specific investments in core foreign operations exposed to  foreign currency translation movements. The resultant change in the Australian dollar value of the foreign investment is captured in  the foreign currency translation reserve, a component of regulatory capital. This offsets the corresponding movement in the capital  requirements of these investments.  As a result of the Consolidated Entity’s foreign exchange policy, the Consolidated Entity is partially exposed to currency risk in  relation to the translation of its net investment in foreign operations to Australian dollars.  The table below indicates the sensitivity to movements in the Australian dollar rate against various foreign currencies at 31 March.  The Consolidated Entity is active in various currencies globally – those with the most impact on the sensitivity analysis below are  USD, GBP, CAD and EUR.  Market risk  continued  2014  2013  Movement in exchange rates  %  Sensitivity  of equity  after tax  $m  Movement in exchange rates  %  Sensitivity  of equity  after tax  $m  Consolidated  USD  +10  (320.0)  +10  (300.2)  GBP  +10  (64.0)  +10  (32.9)  CAD  +10  (26.6)  +10  (25.7)  EUR  +10  (31.0)  +10  (14.5)  Total  (441.6)  (373.3)  USD  –10  391.1  –10  366.8  GBP  –10  78.3  –10  40.2  CAD  –10  32.4  –10  31.4  EUR  –10  37.9  –10  17.8  Total  539.7  456.2  193 