Foreign-Exchange Risk
1. The risk of an investment's value changing due to changes in currency exchange rates.
2. The risk that an investor will have to close out a long or short position in a foreign currency at a loss due to an adverse movement in exchange rates. Also known as "currency risk" or "exchange-rate risk". Investopedia Says:
This risk usually affects businesses that export and/or import, but it can also affect investors making international investments. For example, if money must be converted to another currency to make a certain investment, then any changes in the currency exchange rate will cause that investment's value to either decrease or increase when the investment is sold and converted back into the original currency. Related Terms:
China Investment Corporation - CIC
Currency Certificate
Exchange Rate
Export-Import Bank Of The United States - Ex-Im Bank
Foreign Currency Effects
Forex - FX
Leads And Lags
Overnight Trading
Transaction Exposure
Translation Exposure |