What is currency risk in SAP FIN-FSCM-TRM-TM - Transaction Manager?

SAP Term: currency risk

• Component: FIN-FSCM-TRM-TM

• Component Name: Transaction Manager

• Description: An imminent revenue loss and reduction in assets as a result of a change in the exchange rate. &EXAMPLE& Payment flows in the foreign currency without counter transactions in the same time period Positions that have a lower value on the valuation key date because of changed exchange rates

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• Key Concepts: 
  Currency risk is the risk of losses due to changes in exchange rates. It is a type of financial risk that arises from the change in price of one currency against another. In the context of SAP Transaction Manager, currency risk is managed by setting up currency hedging strategies and monitoring currency fluctuations. 
  
  How to use it: 
  In SAP Transaction Manager, currency risk can be managed by setting up hedging strategies and monitoring currency fluctuations. Hedging strategies involve entering into contracts that protect against losses due to changes in exchange rates. These contracts can be forward contracts, options, or swaps. Monitoring currency fluctuations involves tracking the exchange rate between two currencies and taking action when the rate changes significantly. 
  
  Tips & Tricks: 
  It is important to monitor currency fluctuations regularly in order to minimize losses due to changes in exchange rates. Additionally, it is important to understand the different types of hedging strategies available and how they can be used to protect against losses due to currency risk. 
  
  Related Information: 
  For more information on managing currency risk with SAP Transaction Manager, please refer to the official SAP documentation here: https://help.sap.com/viewer/product/FIN_FSCM_TRM_TM/7.5/en-US