Currency Risk
a.k.a. Exchange rate risk, FX risk
The chance of losing money because exchange rates move against you.
In plain English
The chance of losing money because exchange rates move against you.
Currency risk hits anyone with money in more than one currency. An American who buys Japanese shares can make money on the shares and still lose if the yen falls against the dollar.
Traders take currency risk on purpose; businesses and investors often try to reduce it with hedging.
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