Explain the impact of exchange rate fluctuations on international business
In 2016, the fashion industry's worldwide estimated market size was $2.4 trillion, according to McKinsey & Company: that exceeds the GDPs of India or Italy, and it generated more value than media, transportation, or professional services. 1 But "shocks to the cost base, such as the impact of plummeting exchange rates on sourcing costs, are a constant threat. Evaluation of changes in the exchange rate on business. The effect of the exchange rate on business depends on several factors. 1. Elasticity of demand. If there is a depreciation in the value of the Pound, the impact depends on the elasticity of demand. The indirect impact of exchange rates and their fluctuations extends much more broadly and deeper in ways that affect several of the most important aspects of our economic lives—like how long it