Powerful Essays
EMU@10 Research
In May 2008, it will be ten years since the final decision to move to the third and final stage of
Economic and Monetary Union (EMU), and the decision on which countries would be the first to introduce the euro. To mark this anniversary, the Commission is undertaking a strategic review of
EMU. This paper constitutes part of the research that was either conducted or financed by the
Commission as source material for the review.

Economic Papers are written by the Staff of the Directorate-General for Economic and Financial
Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis.
The views expressed are the author’s alone and do not necessarily correspond to those of the European
Commission. Comments and enquiries should be addressed to:
European Commission
Directorate-General for Economic and Financial Affairs
B-1049 Brussels
E-mail: Ecfin-Info@ec.europa.eu

This paper exists in English only and can be downloaded from the website http://ec.europa.eu/economy_finance/publications A great deal of additional information is available on the Internet. It can be accessed through the
Europa server (http://europa.eu)
Brussels: Office for Infrastructures and Logistics in Brussels, 2008
ISBN 978-92-79-08224-5 doi: 10.2765/22092
© European Communities, 2008

Hedging and invoicing strategies to reduce exchange rate exposure: a euro-area perspective 1
Björn Döhring
European Commission
January 2008

Domestic-currency invoicing and hedging allow internationally active firms to reduce their exposure to exchange rate variations. This paper discusses exchange rate exposure in terms of transaction risk (the risk of variations of the value of committed future cash flows), translation risk (the risk of variations of the value of assets and liabilities

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