Foreign exchange risk - Financial definition
Financial acronyms
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Concise definition of the term foreign exchange risk
Foreign exchange risk is the risk of a financial loss caused by a change in foreign exchange rates.
Comprehensive definition of the term foreign exchange risk
Foreign exchange risk can occur when a company or investor is to pay or receive funds denominated in foreign currency at some point in the future.
It can be the result of trading in foreign currencies, making loans or deposits in foreign currencies, or from investing in foreign currency-denominated securities or other assets.