Basics

What is currency risk?

Currency risk is the risk that a foreign currency falls against your own while you own something in that currency. Buy a US stock and you really own two things: the stock and dollars. If the stock rises 10% but the dollar falls 10% against your currency, you have made almost nothing at home. The other way round, a rising dollar can give you a gain even if the stock stood still.

A worked example

You buy a US stock for 1,000 dollars when 1 dollar costs 7.00 kroner. That is 7,000 kroner.

The stock rises 10% to 1,100 dollars. Nice.
But the dollar has fallen to 6.30 kroner — 10% lower.
1,100 × 6.30 = 6,930 kroner. You have lost 70 kroner, even though the stock rose 10%.

Had the dollar instead risen to 7.70, you would have 8,470 kroner — a 21% gain on a stock that rose 10%. The currency works both ways.

Which currencies matter

Your own currency: No currency risk on domestic stocks. For Danes, the euro is almost the same: the krone is pegged to it and moves under 1%.
The dollar: The big one. US stocks and most world funds are 60–70% dollars. The dollar can move 10–20% in a year.
Pound, Swiss franc, Swedish and Norwegian kroner, yen: All float freely.

A world ETF quoted in euro is not protected against the dollar. The fund still owns US stocks in dollars — the euro is just the currency the price is shown in.

What you can do

The simple answer: not much, and over the long run it matters less. Currencies swing back and forth, while stocks have historically risen. If you want to avoid the risk, there are currency-hedged funds ("hedged" in the name), which cost a little more. Most long-term investors live with the risk and see it as part of their diversification — the dollar often rises when the world is nervous and stocks fall.

Kiggo says: Buy US stocks and you also buy dollars. That is neither good nor bad — it is just something you should know.

The typical beginner's mistake

Comparing a US stock's return in dollars with your return at home — and wondering about the difference. Your bank usually shows both figures. The one in your own currency is the one you can use.

How you see it in Kiggo

Kiggo shows the price in the stock's own currency and says clearly which currency it is.

Frequently asked questions

Is there currency risk on euro stocks for Danes?

Very little. Denmark keeps the krone fixed against the euro within a narrow band, so a German or Dutch stock gives almost the same return in kroner as in euro.

Do I pay a fee to exchange currency?

Yes, typically 0.25–0.5% of the amount, every time you buy and sell in a foreign currency. It is a cost on top of the commission — check your provider's price list.

Should I choose a currency-hedged fund?

It depends on your time horizon. With many years ahead, most people choose the unhedged one, because hedging costs money and currencies even out. With a short horizon, hedging can give peace of mind. Kiggo does not recommend one or the other.

Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-23.

Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.