The euro has just reached a symbolic milestone. On January 27, it exceeded the $1.20 marka level that had not been reached since November 2021. If the euro returned to 1.18 dollars on Monday, February 2, the American currency lost nearly 11% of its value against the euro in one year. A spectacular fall… which did not seem to worry Donald Trump, since he said to himself “at ease» with a weak dollar to boost American exports.
For the French, this situation is double-edged. If you are planning a vacation in New York or shopping on American sites, your purchasing power across the Atlantic will automatically increase. But for your investments, things get tougher. Because millions of French people hold dollar assets in their savings, often without being aware of it.
Where is the dollar hiding in your savings?
Do you have life insurance? You will have to look into it and check your units of account (UC). If they are invested in international or American funds, you are directly concerned. Everything that is “America”, “S&P 500” Or “Nasdaq” is concerned. But also the ETFs stamped “world” Or “MSCI World“, very popular: they contain around 60 to 70% American stocks. Same observation for the so-called “fundsOverall“. If you are not sure, you can also check the ISIN code of each fund on the Morningstar or Quantalys website to see their detailed geographic exposure.
Second risk zone: your PEA or your securities account. Even if you haven’t bought an American stock like Microsoft or Amazon, they are everywhere, and particularly in American trackers (ETFs) or “world“It’s the same mechanism as for life insurance. Even if these ETFs are denominated in euros, they remain invested across the Atlantic, so the fall in the dollar automatically erodes your gains.
The mechanics are relentless: when the dollar falls, your American assets are worth less once converted into euros. The US dollar has lost 10.95% against the euro over 12 months, if you had invested 10,000 euros a year ago in an American ETF not hedged against currency risk, your investment lost almost 1,100 euros just because of the dollar (before counting stock market performance). For example with the S&P 500: it increased by approximately 17% in 2025. For a French investor? That’s only around +3%…
Should we necessarily panic?
However, don’t panic – unless you need to sell your assets in the coming weeks, the impact could be severe. On the other hand, if you invest for the long term, as is recommended on the stock market (with a horizon of more than eight years), currency fluctuations tend to smooth out over time. Sometimes it’s better not to sell at the worst time and just… wait for the situation to turn around.
Some even see it as an opportunity. With a strong euro, now is the perfect time to buy US assets “on sale“. S&P 500 companies have not lost their intrinsic value; they are simply cheaper for a European investor. If you believe in a rebound in the dollar in the medium term, you could benefit from it.
What if I want to protect myself?
In case you don’t believe in this bounce, there are other options. The first: the ETFs say “hedged“. These funds include hedging against exchange rate risk. You benefit from the performance of the American market without being subject to euro/dollar fluctuations. But be careful, this protection comes at a cost: around 0.3% hedging costs per year. And if the dollar rose again… you would not benefit from it.
Finally, there is still the option of redirecting your funds towards Europe. European stocks display attractive valuations and obviously do not suffer from the exchange rate effect for a French saver. A Euro Stoxx 50 or MSCI Europe ETF may be a relevant alternative.
