Possible losses resulting from exchange rate movements. A foreign currency devaluation, for example, could result in losses on an overseas investment.
The risk that arises from owning or owing foreign currency. If the currency is owned, either in cash or the foreign currency denomination of an asset owned, the risk is that its value will fall. If the currency is owed, the risk is that its value will rise. May be hedged with derivatives or offset with balance sheet measures, such as borrowing in a currency in which assets are denominated or in which receivables are anticipated.
The risk that a long or short position in a foreign currency might have to be closed out at a loss due to an adverse movement in the currency rates.
The risk of loss of value due to the impact of negative changes in exchange rates on cash flows, profits, assets or liabilities denominated in foreign currencies.