Currency risk when investing in US stocks as a European: how the exchange rate changes the value in euros
Currency risk is the chance that the exchange rate changes what an investment is worth in your own currency, even when its price in its own currency stays where it was. For a European who owns a US stock, the value in euros is the dollar price multiplied by the exchange rate, so either can move it, and the two effects multiply. The arithmetic below is not a forecast of where any exchange rate will go.
Updated 22.10.2026
What currency risk is
A US stock is priced in dollars. A person whose spending is in euros sees the dollar price turned into euros at the current rate. If one dollar is worth fewer euros than before, the same dollar price is worth fewer euros, and nothing about the company has changed. A stronger dollar does the opposite.
The arithmetic
The moves are not symmetric. If the euro rises against the dollar, one dollar is worth fewer euros. If the euro falls by the same percentage, one dollar is worth more euros, and the gain is larger than the loss was. The table shows the euro value of a dollar price that does not change at all.
| The euro moves against the dollar | The euro value of an unchanged dollar price |
|---|---|
| Rises 10 percent | Falls about 9 percent |
| Falls 10 percent | Rises about 11 percent |
| Rises 20 percent | Falls about 17 percent |
| Falls 20 percent | Rises 25 percent |
How the two effects combine
The two changes multiply; they are not added. A stock that gains 10 percent in dollars while the euro rises 10 percent against the dollar is worth the same in euros as before, because the gain and the fall of about 9 percent cancel out. A stock that falls 10 percent in dollars while the dollar weakens has both effects pointing the same way, and the loss in euros is larger than 10 percent.
Which effect is larger differs from one period to the next and cannot be known in advance.
The listing currency is not the whole story
A US-listed company can earn much of its revenue in euros. The risk described here is the narrower one that arises when a value is converted into the currency a person measures in.
Euro-denominated and currency-hedged funds are different things
A fund can be quoted in euros and still own US stocks. Its price is in euros, but the dollar effect is inside it: when the dollar weakens, the shares it owns are worth fewer euros, and the price reflects that. A euro quote changes the currency of the price, not of what the fund owns.
A currency-hedged share class uses forward contracts to cancel much of the exchange-rate effect. This has a cost and is not exact, and the gain from a stronger dollar is given up too. A hedged and an unhedged share class of one fund are different products, and the fund's documents say which is which.
What Allocaria shows
On the Overview, the portfolio health rating has an item called Currency risk, next to Diversification and Concentration. It looks at how the value of the priced holdings is spread across the currencies they are denominated in: a portfolio in a single currency gets a lower reading than one spread over two or more. It does not compare that spread with your home currency. An item that cannot be measured is shown as not assessed, with the reason, never as a zero. The Portfolio page shows exposure by sector and by country, not by currency.
Where a figure in dollars or pounds is shown in euros, Allocaria uses daily reference rates: FRED (Federal Reserve Bank of St. Louis) first, then the euro reference rates of the European Central Bank for the days FRED does not have, then the last rates it saved. Only when no rate exists is a fixed stand-in used, and it is labelled as one. The Trust Center names both sources.
What this does not tell you
- Not a forecast: the arithmetic shows what a move would do, not whether it will happen.
- Not an instruction: nothing here says what to do about an exchange rate or about the choice of any fund.
- Not a price you would get: a reference rate is a daily fixing, and a bank or broker applies its own rate and margin.
Common questions
It is the risk that the euro value of a dollar-priced holding changes because the exchange rate moves, even if the dollar price does not. The two effects multiply.
An unchanged dollar price is worth about 9 percent less in euros. If the euro falls 10 percent, it is worth about 11 percent more. This is arithmetic, not a forecast.
No. A euro price does not change what the fund owns, so a fund of US stocks still carries the dollar effect. A currency-hedged share class cancels much of it, at a cost and not exactly.
In part. The health rating has a Currency risk item that measures how spread the value is across currencies, without comparing it to your home currency. The Portfolio page does not list exposure by currency.
In Allocaria
Where the exchange rates come from, in the Trust Center →
The rest lives in your own account: see it next to your own holdings.
Request accessClosed beta · by invitation
General information, not investment, tax or legal advice, and not a recommendation about any security. Allocaria is a decision-support tool; it places no orders and holds no money.