This paper examines empirically how the demand of foreign exchange derivatives by Brazilian corporations is related to their exchange rate exposure. With the help of an original database of 74,567 contracts written from 1999 to 2002 between corporations and financial institutions, we were able to identify the corporations that speculated and the ones that hedged with foreign exchange derivatives during this period. Our results show that the exchange rate exposure is positively related to the foreign operational exposures for firms that speculated and negatively related for firms that hedged in 2002. For the other years of the sample period, speculation or hedge did not affect the relationship between the exchange rate exposure and the foreign operational exposure of firms.