Some claim that exchange rate forecasting is a futile exercise. In a world where exchange rates are free to fluctuate, Fx markets are said to be market rates (ie, forward exchange rates) represent the consensus of all market participants about future FX rates. Information that is generally available i immediately impounded in current Fx such information has little value in predicting future exchange rates. Under these conditions, Fx rate random responses to new information or unforeseen events are Forward exchange rates are the best available estimates of future rates. The randomness of Fx rate changes reflect the diversity of opinions on exchange values by participants thing What do all of these factors imply for management accountants? For one must develop systems that gather and process comprehensive and accurate information on variables correlated with exchange rate movements. These systems can incorporate information provided by external forecasting services, financial publica- tions that track currency movements, and daily contacts with foreign currency dealers. They should be online and computer-based to ensure managers a superior source of information on which to base their currency forecasts. Financial managers must also understand the consequences of not using other forecasting methods If exchange rate forecasting is not possible or too expensive to undertake, then ancial managers and accountants should arrange their company's affairs to minimize the detrimental effects of rate changes. This process is known as exposure management.