In international finance, leads and lags refer to the expediting or delaying, respectively, of settlement of payments or receipts in a foreign exchange transaction because of an expected change in exchange rates.
[1][2] A change in exchange rates can be a cause of loss (or gain) in international trade, thus the settlement of debts is expedited or delayed in an attempt to minimize the loss or to maximize the gain.
"[2] A change in exchange rates can be a cause of loss (or gain) in international trade.
On the other hand, If the euro to U.S. dollar exchange rate is 0.50 one month later, the U.S. importer is able to prepare €1000 with $500 for the payment.
[2] Conversely, if a decline in the exchange rates is expected in the future, the buyer may pay ahead of time to minimize the loss.