Explain: “A world in which exchange rates fluctuate constantly is a threat to international marketing”.  

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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One of the major things that businesses want is certainty.  They wish to be able to predict with a reasonable amount of accuracy what sorts of economic conditions they will face in various markets.  This becomes much more difficult if exchange rates fluctuate constantly.

If exchange rates are fluctuating constantly, it will be very difficult for firms to predict what their costs and their revenues will be.  This will make involvement in international markets much less attractive.  The fluctuating rates will cause them to have so much uncertainty that they will probably try to withdraw from some international markets.  In this way, fluctuating exchange rates are a threat to international marketing because they reduce firms' abilities to predict their costs and revenues.

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