If you are an Importer or Exporter, on the other hand, you will find yourself exposed to easily
identifiable form of foreign exchange risk known as 'Transactional' exposure. This arises from
your need to either buy or sell currency relating to a trade transaction in return for sterling.
Movements in exchange rates can work in your favour and enhance profitability but, equally, they
can have the opposite effect and seriously erode profit margins or lead to making a loss.
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