A mechanism by which foreign currencies could be
purchased and sold, and pricing is the key element of it or the rate of
currency where it could be bought or sold which could vary on the stock
markets. There are mainly several kinds used in the international businesses of
the foreign exchange markets. Hofstede’s cultural dimensions identifies number
of factors such as society, money, things, and importance of spending money.
Companies or investors desire to convert currency
into other currencies. The major purpose of the company to covert its currency
into any other currency to pay or gain money for the goods and services.
Consider the nova energy drink business need to import beverages from Oregon; the
company needs to pay customs duties on the beverages. Now at this stage company
do not any need to go related branch to convert and then pay. The company just
need to instruct its bank to pay each of the suppliers in their current
currencies. However, the bank will convert currencies, and debit company
account for US dollar equivalent to the United States dollar‘s rate.
Currency Hedging is in the biggest challenges in the
foreign exchange that has a high risk of the currency rates in increasing or
decreasing in the higher amounts Invalid source specified.. It refers to a particular
technique for the protection against the heavy losses that are negative changes
in the exchange rates.