Currency risk: Difference between revisions

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The risk of losses or other adverse effects resulting from a change in a foreign exchange rate, or from other unfavourable changes in relation to a foreign currency.  
The risk of losses or other adverse effects resulting from a change in a foreign exchange rate, or from other unfavourable changes in relation to a foreign currency.  


Examples include:
Examples include:

Revision as of 09:37, 1 June 2015

The risk of losses or other adverse effects resulting from a change in a foreign exchange rate, or from other unfavourable changes in relation to a foreign currency.


Examples include:

(i) a final receipt/payment of a different amount of domestic currency equivalent, than expected when a currency transaction was committed to (transaction risk), or


(ii) a change in asset/liability values in a balance sheet, profit/loss in an income statement (translation risk), or


(iii) a change in competitiveness as rates change relative to buyers, suppliers or competitors (economic risk).


A more complex area of risk concerns contingent, or pre-transaction risk.


Also known as Currency exposure or Foreign exchange risk.


See also


Other links

Currency risk, Will Spinney, ACT 2009