Currency fluctuations impact the relative profit expected from sales by affecting the value of revenues and costs in different currencies. When a company's operating in multiple countries, changes in exchange rates can lead to variations in profitability. For example, a strong local currency can reduce the competitiveness of exports by making them more expensive for foreign buyers, while a weak local currency can increase profit margins on foreign sales. Effective currency risk management is essential to mitigate these impacts.References:
"Managing Currency Risk in Global Supply Chains," Deloitte.
"The Effects of Exchange Rate Fluctuations on Global Supply Chains," Journal of International Business Studies.
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