According to AASB 121 The Effects of Changes in Foreign Exchange Rates, the currency of the primary economic environment in which the foreign entity operates is the:

A) local currency.
B) foreign currency.
C) functional currency.
D) presentation currency.

AASB 121

The Australian Accounting Standards Board document that refers to the effects of changes in foreign exchange rates on financial reporting.

Functional Currency

The currency of the primary economic environment in which an entity operates, used in its financial reporting.

Primary Economic Environment

The main economic setting in which a company operates and carries out its operations, often determined by its reporting currency and major market.