Happens when a company operates with foreign currency-denominated contracts (possible changes in the exchange rate).
Risk to a firm with known future cash flows in a foreign currency that arises from possible changes in the exchange rate. Related: translation exposure.
in foreign exchange, is the possibility of incurring exchange gains or losses on transactions already entered into and denominated in a foreign currency. It is typified by real exchange gains or losses and mixes retrospective and prospective views. It is short-term in nature.