Foreign exchange risk impacts product pricing and marketing strategies globally.
This paper explores how changes in foreign exchange rates can impact the pricing and marketing of products in foreign markets. It looks at different types of foreign exchange exposure and suggests ways to manage the associated risks. The traditional method of hedging in the forward exchange market is discussed, along with how pricing adjustments can also help mitigate foreign exchange risk. The study provides formulas to estimate adjusted prices that reflect the impact of foreign exchange fluctuations.