Foreign Exchange Risk
The risk that the value of a future receipt or obligation will change due to variations in foreign exchange rates.
For example, you might find that after agreeing to a price for exported or imported goods the exchange rate changes before delivery. Clearly, this can work both for and against an individual or a firm. Exchange rates can both go up and down, the risk associated with them is the foreign exchange risk which can result in significant financial loss.
For example, you might find that after agreeing to a price for exported or imported goods the exchange rate changes before delivery. Clearly, this can work both for and against an individual or a firm. Exchange rates can both go up and down, the risk associated with them is the foreign exchange risk which can result in significant financial loss.