FX exposure is the potential financial effect of exchange-rate movements on amounts a business expects to pay, receive, own, or owe in another currency. The size and timing of invoices, cash flows, and balances determine how a currency movement affects the business.
Quick reference for FX exposure
| Check | What it means for the transaction |
|---|---|
| Category | Global B2B payment operations |
| Record to keep | Keep the instruction, party and account identifiers, validation result, timestamps, institution references and reconciliation outcome. |
| Do not infer | Initiation, processing, clearing and settlement are different events. One status should not be used as proof of another. |
FX exposure and nearby terms
- Currency hedging: Currency hedging uses financial or operational techniques to reduce uncertainty from future exchange-rate movements.
- Foreign exchange rate: A foreign exchange rate states how much of one currency is exchanged for another.
