Leach, R. (n.d.). A Concise Encyclopedia of the European Union from Aachen to Zollverein. Retrieved Jan. 09, 2005, from A-Z of Europe Web site: http://www.euro-know.org/dictionary/.Dennis writes that in export sales transactions, buyers and sellers rarely use the same currency, and the relative value of their respective currencies constantly changes. Depending on whether the sale is to be paid in the buyer's currency or the seller's currency, one party or the other incur additional risks and lost profits when foreign exchange rates are unfavorable to that party to the transaction. This is the result of changes in the relative value of two currencies between the time the goods are sold and the time they are paid for. Dennis writes that foreign exchange rate fluctuation is one of the risks of selling internationally. Currency exchange rates are influenced by a variety of factors including supply and demand; interest rate differentials; economic news; political events; and government intervention and there is no single entity that regulates or controls the foreign exchange market. There are a variety of ways to hedge against unfavorable changes in the value of foreign currency exchange rates, including these: Wikipedia, (2005). Retrieved Jan. 09, 2005, from History of the European Union Web site: http://en.wikipedia.org/wiki /History_of_the_European_Union. The future of the EU seems bright. The EU is expected to increase the nations that are members for the next several years. Following the successful introduction of the Euro in many EU countries, other EU member nations are looking carefully at the benefits of becoming more fully integrated economically by becoming members of the EMU. The fluctuations described in the previous paragraph relating to exchange rates suggest that foreign exchange rates fluctuate in a narrow range which has a positive effect on the EU's ability t |
