Perspectives · Currencies · 2026

Currency risk: the second return inside every foreign investment

When you hold an asset priced in another currency, you have two exposures: the asset itself and the exchange rate. A share can rise 10% in its home market and still lose you money if the currency falls by more.

Currencies can move sharply. The Swiss franc surged in a day in January 2015 when the Swiss National Bank dropped its euro cap. The pound dropped after the 2016 Brexit vote and again during the 2022 mini-budget. The yen has weakened sharply at times, prompting joint US and Japanese intervention in July 2026.

You can reduce currency risk by hedging, which has a cost, or accept it as part of holding global assets. Neither is right for everybody. What matters is knowing which you are doing.

On this platform, amounts are reported in US dollars, and any investment priced in another currency carries that exposure.

General information only; not investment advice. Read the risk warning.