into U.S. dollars. We review our monthly expectednon-U.S. dollar denominated expenditures and look to hold equivalentnon-U.S. dollar cash balances to mitigate currency fluctuations. This has resulted in a foreign exchange loss of $162,000 and $111,000 for the second quarter and first half of 2018, respectively, and a foreign exchange loss of $23,000 and $85,000 for the comparable periods of 2017.
As a result of currency fluctuations and the remeasurement ofnon-U.S. dollar denominated expenditures to U.S. dollars for financial reporting purposes, we may experience fluctuations in our operating results on an annual and quarterly basis. To protect against the increase in value of forecasted foreign currency cash flow resulting from salaries paid in currencies other than the U.S. dollar during the year, we follow a foreign currency cash flow hedging program. We hedge portions of the anticipated payroll for ournon-U.S. employees denominated in currencies other than the U.S. dollar for a period of one to twelve months with forward and option contracts. During the second quarter and first half of 2018, we recorded accumulated other comprehensive loss of $71,000 and $75,000, respectively, from our forward and option contracts, net of taxes, with respect to anticipated payroll expenses for ournon-U.S. employees. During the second quarter and first half of 2017, we recorded accumulated other comprehensive loss of $38,000 and $5,000, respectively, from our forward and option contracts, net of taxes, with respect to anticipated payroll expenses for ournon-U.S. employees. As of June 30, 2018, the amount of other comprehensive loss from our forward and option contracts, net of taxes, was $75,000, which will be recorded in the consolidated statements of income during the following five months. We recognized a net loss of $177,000 and $196,000 for the second quarter and first half of 2018, respectively, and a net gain of $42,000 and $188,000 for the comparable periods of 2017, related to forward and options contracts. We note that hedging transactions may not successfully mitigate losses caused by currency fluctuations. We expect to continue to experience the effect of exchange rate and currency fluctuations on an annual and quarterly basis.
The majority of our cash and cash equivalents are invested in high grade certificates of deposits with major U.S., European and Israeli banks. Generally, cash and cash equivalents and bank deposits may be redeemed and therefore minimal credit risk exists with respect to them. Nonetheless, deposits with these banks exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits or similar limits in foreign jurisdictions, to the extent such deposits are even insured in such foreign jurisdictions. While we monitor on a systematic basis the cash and cash equivalent balances in the operating accounts and adjust the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which we deposit our funds fails or is subject to other adverse conditions in the financial or credit markets. To date, we have experienced no loss of principal or lack of access to our invested cash or cash equivalents; however, we can provide no assurance that access to our invested cash and cash equivalents will not be affected if the financial institutions that we hold our cash and cash equivalents fail.
We hold an investment portfolio consisting principally of corporate bonds. We have the ability to hold such investments until recovery of temporary declines in market value or maturity. Accordingly, as of June 30, 2018, we believe the losses associated with our investments are temporary and no impairment loss was recognized during the first half of 2018. However, we can provide no assurance that we will recover present declines in the market value of our investments.
Interest income and gains and losses from marketable securities, net, were $0.94 million and $1.81 million for the second quarter and first half of 2018, respectively, as compared to $0.78 million and $1.41 million for the comparable periods of 2017. The increase in interest income and gains and losses from marketable securities, net, during the second quarter and first half of 2018, reflected higher combined cash, bank deposits and marketable securities balances held and higher yields.
We are exposed primarily to fluctuations in the level of U.S. interest rates. To the extent that interest rates rise, fixed interest investments may be adversely impacted, whereas a decline in interest rates may decrease the anticipated interest income for variable rate investments. We typically do not attempt to reduce or eliminate our market exposures on our investment securities because the majority of our investments are short-term. We currently do not have any derivative instruments but may put them in place in the future. Fluctuations in interest rates within our investment portfolio have not had, and we do not currently anticipate such fluctuations will have, a material effect on our financial position on an annual or quarterly basis.
Item 4.CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2018.
There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
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