An increase in the number of businesses hedging against – or speculating for – exchange rate fluctuations leads to higher commission income from currency translations and future contracts. The euro exchange rate not only influences the proceeds from business activities, like imports and exports. Exchange rate movements also work through to the value of assets and liabilities expressed in foreign currencies.
The 20% fall of the dollar rate in 2003 translated into a EUR 4 billion loss for Dutch businesses, approximately 1% of Dutch national output. The net wealth effects of exchange rate and price movements in 2003 were insignificant, as overall cross-border claims and liabilities rose by about just as much.