Indirect forex risk in buying ADRs?

Discussion in 'Stocks' started by rsi80, Jul 9, 2013.

  1. rsi80

    rsi80

    Hi

    When we buy the ADRs of foreign companies listed on the NYSE, is FX risk indirectly assumed?

    For example, suppose the share price of a Brazilian company listed on the Bovespa exchange remains unexchanged but the Brazilian real weakens against the US dollar continuosly. Will the company's ADRs fall somewhat in sync in consequence?

    Your insight, please!
     
  2. rsi80

    rsi80

    Anyone?
     
  3. newwurldmn

    newwurldmn

    yes. it does.