# Currency Risk

*Risk & Portfolio — Finicade finance glossary*

Currency risk is the effect of exchange rate moves on the value of a foreign asset or cash flow measured in your own currency. It's often unrewarded: over long horizons currency moves add volatility without adding expected return, which is the argument for hedging bonds and, more contentiously, for leaving equities unhedged since currency and equity moves often partly offset.

**Also known as:** FX risk, exchange rate risk, translation risk

**Related terms:** [Exchange Rate](https://finicade.com/glossary/exchange-rate), [Hedging](https://finicade.com/glossary/hedging), [Currency Swap](https://finicade.com/glossary/currency-swap), [Country Risk](https://finicade.com/glossary/country-risk), [Carry Trade](https://finicade.com/glossary/carry-trade)

Source: https://finicade.com/glossary/currency-risk