currency risk
Definition
The risk that a business' operations or an investment's value will be affected by changes in exchange rates. For example, if money must be converted into a different currency to make a certain investment, changes in the value of the currency relative to the American dollar will affect the total loss or gain on the investment when the money is converted back. This risk usually affects businesses, but it can also affect individual investors who make international investments. also called exchange rate risk.
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Related Terms
covered arbitrage, money market hedge
'currency risk
' appears in the definitions of these terms on BusinessDictionary.com
covered arbitrage, red clause letter of credit (L/C), currency futures
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