Managing the risk from currency exchange

Managing the risk from currency exchange | Insurance Business America

Managing the risk from currency exchange
Many businesses operate globally and the internet has increased the potential for more to benefit from international trade but with economic volatility there are risks from currency exchange rates. While a strong US dollar for example is good for importers and businesses that spend heavily on overseas travel it has a negative effect for exporters and those providing services globally. How to set prices for overseas clients needs careful consideration; pricing in US dollars could mean that the business becomes less competitive than local competitors however pricing in local currency may wipe out profits, especially when exchange fees are factored in. Clever accounting practices may be able to mitigate some of the risk but there is certainly much to be considered when trading globally.