Translation exposure affects the exchange rate movement

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As you may know, America is one of the largest oil producers in the world and it is in the top 10 oil exporters. In addition, the USD is the most commonly used currency in settlements of international trade and finance transactions.

Assume that US oil exporters can invoice their sales in USD. Does this mean they are shielded from exchange rate movements?

Please expand on how transaction exposure, economic exposure, and translation exposure affects the exchange rate movement?

Reference no: EM133084264

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