Currency exchange rates and your business
- Edited 8 October 2026
- 3 min
- International
- Managing and growing
- Sandra Visser-Meijer
Occasionally, suppliers offer products or services in another currency. In US Dollars, for example. Or your customers want to pay in a currency other than the euro. The price you pay for another currency is called the exchange rate. If this exchange rate rises or falls, it affects importers and exporters. Sometimes you pay or receive more or less money.
Currency in a country can be affected by economic sanctions, war, or bad macroeconomic data. Investors and members of the public are losing confidence in the economy and the currency. As a result, the stock market and the currency are fluctuating. You see this, for example, in countries where economic uncertainty is on the rise.
Do you do business outside the eurozone? If so, the exchange rate will affect your prices. Your product or service may become more expensive or cheaper. But what does such a change in the exchange rate mean for your imports or exports?
Consequences for importers and exporters
A rise or fall in the exchange rate of one currency compared with another determines whether your imports or exports become more or less favourable.
Effects of exchange rate increase or decrease
For the importer, if the euro increases compared other currencies, the product becomes cheaper. If other currencies increase higher than the euro, the product becomes more expensive.
The opposite is true for the exporter. If the euro increases compared to other currencies, the product becomes more expensive. If other currencies increase compared to the euro, the product becomes cheaper.
Currency market
The currency market is always changing. You trade different currencies here. For example, the euro, US dollar, British pound, and Chinese renminbi. With one currency you buy another currency. Like buying US Dollars that you pay for with Euros. In the foreign exchange market, supply and demand of money come together. This creates the price of a particular currency. And this price is called the exchange rate.
Covering currency risk
You can have a currency when paying or getting paid in another currency. Does the exchange rate of the other currency fall? You as the exporter will receive less money. Is the value of the foreign currency rising against the euro? If so, as an importer, you will actually end up paying more in euros. A small fluctuation can therefore have a direct impact on your profits or costs
You can cover currency risks in various ways. For example, include a currency clause in your contract. In it you state that the price will fluctuate in line with the exchange rate at the time of payment.
Do you, for example, do a lot of business with the United States? If so, you can also open a foreign currency account with your bank. You will then be able to receive and make payments directly in that currency. Always discuss with your bank to find out what suits your business best. Also look at the costs the bank charges for international payments.
How does an exchange rate work?
A strong euro means that the exchange rate of the euro is high compared to other currencies. A high euro exchange rate makes our products and services more expensive for foreign customers.
For importers, it works differently. As an importer, a high euro exchange rate means you actually pay less for products from abroad.
Example importer
You are negotiating with a Chinese supplier about purchasing a container of shorts. The supplier charges 55,000 US dollars. You agree to pay in US dollars. At an exchange rate of €1 = $1.10, the container costs €50,000.
A month later, you place the order. In the meantime, the euro has risen against the US dollar to €1 = $1.20. For the agreed $55,000, you now pay approximately €45,833. The stronger euro means the container works out cheaper for you.
Example: exporter
You negotiate with an American customer about the sale of a product with a value of €100,000. The exchange rate of €1 expressed in US dollars at that time is:
€1 = $US 1.10, meaning €100,000 = $110,000.
After a month you close the deal. During that month, the exchange rate of the euro increased against the US dollar, namely:
€1 = $1.20, meaning €100,000 = $120,000.
Your US customer must pay more US dollars for the purchase. Your product has become more expensive for them.
No currency risks in the eurozone
is the collective name for the countries of the EU whose currency is the euro. Trading with one of these countries is easy and attractive for a Dutch company. If you pay or are paid in euros, you do not have any currency risk.
Doing business outside the eurozone
Do you do business with countries outside the eurozone? Then the euro’s value against the other currency’s value determines if the import or export is cheaper or more expensive. The euro is also legal tender in countries outside the eurozone. Check with your foreign business partner if you can pay with the euro. This way you avoid any currency risk.
