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Exchange Rate Impact Calculator

Work out exchange rate impact instantly with clear inputs, formula shown and shareable results.

About Exchange Rate Impact Calculator

Currency exposure is net, not gross: foreign revenue offsets foreign costs, and only the difference is exposed. Multiplying that net exposure by the rate movement gives the translation impact on home-currency profit, which is what a natural hedge is designed to shrink.

Formulas

Net exposure

Net exposure = Foreign currency revenue - Foreign currency costs

Translation impact

Impact = Net exposure x (Current rate - Budget rate)

Worked example

With the default values below, Exchange Rate Impact Calculator returns Impact on home-currency profit of $12,690,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Foreign currency revenue
4,500,000
Exchange rate at budget
81.5
Exchange rate now (enter today's rate)
86.2
Foreign currency costs
1,800,000

Results

Impact on home-currency profit
$12,690,000.00
Net foreign currency exposure
$2,700,000.00
Exchange rate movement
5.77%
Revenue translated at the current rate
$387,900,000.00

Step by step

  1. 1Values used
  2. 2Net exposure
  3. 3Translation impact
  4. 4Impact on home-currency profit= 12,690,000.00
  5. 5Net foreign currency exposure= 2,700,000.00
  6. 6Exchange rate movement= 5.77
  7. 7Revenue translated at the current rate= 387,900,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

Frequently Asked Questions

What is a natural hedge?

Matching foreign currency costs against foreign currency revenue so the net exposure — and therefore the impact — is small without any derivative contracts.

Should I hedge the residual?

Hedge what would materially affect covenants or guidance. Hedging everything is expensive and simply converts currency risk into carry cost.

Related Calculators

Exchange Rate Impact Calculator | Calcrivo