Risk Terms

Currency Risk

Definition

What is Currency Risk?

The possibility that exchange-rate movements will change an investment's value in the investor's home currency.

Example in practice

A foreign-currency fund gains 5%, but its value in the investor's home currency changes when the exchange rate moves.

Keep learning

The possibility of loss because broad market prices or rates move against an investment.

The possibility that a borrower or issuer will fail to make promised payments or suffer a downgrade.

The possibility that changing market interest rates will reduce an investment's value or income appeal.

A day on which relevant financial institutions and markets are open for normal processing.

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