How is currency risk exposure classified? What is the main purpose of the foreign exchange markets?
December 31st, 2009 | 
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How is currency risk exposure classified?
Not sure what you are asking there… I’m not aware of any classifications for currency risk exposure.
From a trading point of view:
– If you are long a currency, then that is your exposure.
– If you are short a currency, then that is your exposure.
From an economic point of view:
– if you need to purchase goods and services on the international market and you agree on a price at a date in the future – then you carry some risk – see above.
What is the main purpose of the foreign exchange markets?
Allow two different currencies to be exchanged at what ever price the buyers and sellers agree. Currencies measure value, so it they allow value to be traded from one country/area to another.
Posted in foreign markets
How is currency risk exposure classified?
Not sure what you are asking there… I’m not aware of any classifications for currency risk exposure.
From a trading point of view:
– If you are long a currency, then that is your exposure.
– If you are short a currency, then that is your exposure.
From an economic point of view:
– if you need to purchase goods and services on the international market and you agree on a price at a date in the future – then you carry some risk – see above.
What is the main purpose of the foreign exchange markets?
Allow two different currencies to be exchanged at what ever price the buyers and sellers agree. Currencies measure value, so it they allow value to be traded from one country/area to another.
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