Currency exchange risk

Currency Exchange Risk
Uncertainty about the rate at which revenues or costs denominated in one currency can be converted into another currency.
Currency Hedge ...

Currency exchange risk: The risk that the value of an investor's domestic currency may drop against the value of the currency in which an investment is held. Much of this risk can be hedged away through the market for forwards and futures.

Some companies may wish to avoid foreign currency exchange risks like those just illustrated. The simplest way is to convince a trading partner to make or take payment in the home currency.

Global Bonds
Mutual fund investing primarily in debt obligations (i.e. bonds) of foreign governments and/or corporations. Global bond funds can also be subject to foreign currency exchange risks.

See also: Currency exchange, Exchange risk, Stock Dividend, Dilution, Complaint