Finance ABC

Welcome back to another episode of Finance ABC. I’m your host, Emma Lai, and today, we’re talking about a topic that’s critically important for any business or investor involved in global markets: managing foreign exchange risk. It’s a concept that can sound a bit intimidating, but foreign exchange risk—also called FX risk or currency risk—is essentially the financial exposure that businesses or investors face when dealing in multiple currencies. With economies interconnected and companies increasingly operating across borders, understanding and managing FX risk is key to ensuring that profits don’t get eroded by unexpected currency fluctuations.