Currency gain and loss

Profit or loss that comes from the exchange rate alone

In detail

An asset held in another currency changes value at home whenever the rate moves, even if the asset itself does nothing. A weaker home currency produces a gain and a stronger one a loss. With foreign shares this combines with the price move to give the final result.

Example

Measured in yen, an asset bought at 150 to the dollar gains about 6.7% if the rate reaches 160.

Differences by country

South Korea — Measured in won, a $10,000 asset bought at 1,300 per dollar grows from 13 million to 14 million won if the rate reaches 1,400.

Related terms

Exchange rate Currency risk Foreign stocks

Read in the app (App Store)

For learning, not investment advice. Decisions are your own.