Transaction exposure refers to variations in a financial position's value brought on by foreign exchange fluctuations between the contract's establishment and settlement.
Transaction exposure refers to the level of risk that companies involved in international trade face as a result of currency fluctuations. A high level of exposure to exchange rates can lead to significant losses, despite the fact that steps can be taken to reduce those risks.
This exposure arises from the variation in foreign exchange rates between the booking and settlement dates of a transaction.
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