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A naive question around CDS in a foreign currency.Say I have a CDS that trades in USD and I'd like to create (in a buying protection sense) the equivalent CDS position in another currency CCY. I'm putting risk issues around the IR in both USD and CCY to one side for now since I think my bigger concern is the FX risk. On default my counterparty who has sold me protection on Notional in CCY pays me LGD*Notional in CCY but on my initial USD position I have to pay USD but can only exchange CCY at the prevailing spot rate in the event of default.I wanted to start with the simplest case of zero correlation between credit spread and the FX rate and work my way up to correlated cases. Qualitatively all the quanto CDS expressions I've seen seem to suggest that there would be no quanto adjustment if there is no correlation between the CDS spread and the FX rate. I'm puzzled by this since the broad stroke hedge strategy that I was thinking of would involve some CDS protection and rebalancing of FX Forward positions based on default probabilities would seem to incur a cost. (I'm kind of treating this as analogous to CVA on an FX position)Can anyone familiar with this topic put me out of my misery.Thanks

Very loosely speaking, if there is no correlation between the default generating process and the FX process, then the hedging P/L upon default will be "noise". As long as it is small relative to your overall portfolio, it can be diversified away. If you choose to take an asymmetric (CVA like) perspective on the potential gain and loss, or your position is large, then it will appear like a cost and you may not want to be in this particular line of business unless you are paid very well. More generally, standard quanto formulas are dodgy in this context, since they don't account for jumps, which are rather the typical move when a default occurs.