What term describes the risk that currency value changes will affect the profitability of international transactions?

The term that accurately describes the risk that changes in currency value will impact the profitability of international transactions is currency risk. This risk specifically pertains to the potential for financial losses resulting from fluctuations in exchange rates between different currencies. For businesses engaged in international trade, currency risk can arise from various factors such as changes in market conditions, geopolitical events, or economic shifts that may influence exchange rates.

While 'exchange risk' is often used interchangeably with 'currency risk,' the latter is the more recognized term within the finance and international business communities. Market risk refers to the potential losses due to broader market movements that can affect overall investment values, while interest rate risk pertains specifically to fluctuations in interest rates affecting borrowing costs and investment returns. Hence, currency risk best encapsulates the nature of the risk involving changes in currency values and their direct impact on international transactions.