Foreign exchange rates explained for Dutch businesses

Key takeaways

• FX rates differ widely between providers, and the rate you see online is rarely the rate you receive when making international payments.

• For Dutch businesses, FX movements and bank markups can meaningfully affect margins, pricing, cash flow, and the final amount received.

• Airwallex offers transparent, market-leading FX rates and multi-currency accounts, helping Dutch businesses reduce costs and manage cross-border payments efficiently.

Imagine your company just processed a $50,000 payment from a US client. 

You expected €43,200, based on the exchange rate (FX rate), but only €42,500 arrived. Where did that €700 disappear to?

Most Dutch businesses know FX rates fluctuate, but hidden fees and inflated rates can quietly eat into profits on international transactions. Whether you're paying suppliers in Asia, invoicing clients in the US, or managing cross-border expenses, understanding how FX rates work can significantly reduce your conversion costs.

Here's what every Dutch company needs to know about accessing fair FX rates.

Explaining foreign exchange rates

An FX rate is simply the price of one currency expressed in another. If EUR/USD is 1.10, it means one euro can buy $1.10. 

These rates aren't set by governments or central banks; they're determined by the global FX market, where banks, financial institutions, and traders buy and sell currencies around the clock. Since the market never stops moving, FX rates change constantly throughout the day. 

The rate you get when exchanging funds depends on your provider. ING might offer 1.08 while Rabobank offers 1.095 at the same time.

Why businesses should understand foreign exchange rates

Understanding exchange rates gives you control over costs that too many companies accept as fixed. It can help you:

• Time large outgoings, like overseas supplier payments, to avoid periods when the euro is weakening 

• Choose providers that offer better rates 

• Price contracts to protect margins

• Stay competitive when the euro strengthens

• Plan cash flow more accurately by anticipating FX costs and building them into your pricing.

For businesses ready to expand internationally, our cross-border payments guide breaks down everything you need to know about going global.

Drivers of currency exchange rates

FX rates respond to dozens of different forces, and predicting which one will dominate makes currency trading a trillion-dollar business.

Central bank policy and inflation expectations are major drivers. If the European Central Bank cuts interest rates to fight low inflation, the euro tends to weaken. Rising inflation can trigger higher interest rates, which strengthen a currency by attracting investors chasing higher yields.

Economic data, such as strong GDP or employment figures, also tends to strengthen currencies, while weak data does the opposite.

Market sentiment can amplify or mute these effects. During periods of uncertainty (like a global pandemic), investors often flock to “safe haven” currencies regardless of the data. In calmer periods, minor policy tweaks or data releases can trigger major moves as traders reposition for future trends.

Understanding these forces can help you anticipate volatility and make more informed decisions around international payments. 

Types of exchange rates businesses should know

Not all FX rates are the same. The rate you see online differs from what your bank charges, and both differ from the rates you can lock in for future payments. 

Mid-market rate (also called interbank rate)

This is the "true" exchange rate between currencies: what you see when you Google EUR/USD. 

Buy/sell rates

When you want to convert currency, providers will quote you their buy and sell prices. Traditional banks often charge 2-3% above mid-market rates, whereas modern providers like Airwallex offer 0.5-1%.

Spot vs forward rates

Spot rates are for immediate conversion.  Forward rates let you lock in today’s exchange rate for a future payment – useful for larger invoices due in three months. 

Fixed vs floating rates

Floating rates change with market conditions and apply to most major currency pairs (EUR, USD, GBP). Fixed rates are pegged to another currency or basket, such as the Chinese yuan, making them more stable on a day-to-day basis but prone to larger shifts when policies change.

How foreign exchange impacts Dutch businesses

The reality of running an international business is that currency movements can turn your best quarter into your worst, regardless of operational performance. 

Imagine invoicing a US client in dollars based on current exchange rates, then EUR/USD exchange rates shift unfavourably in the 30 days before payment arrives. You receive fewer euros than expected, potentially eliminating your profit.

This isn't just relevant for large one-off transactions. Choosing which currency to hold working capital in, timing supplier payments, and even deciding whether to pursue certain international opportunities can hinge on understanding how FX rates will affect your bottom line.

The companies that manage FX well don't try to predict currency movements; they structure their operations to minimise unexpected losses and maintain competitive pricing regardless of where rates move. 

How to get the best FX rates as a Dutch business

Most Dutch businesses default to their regular bank for international transfers without realising how much it’s costing them. Here are some strategies that may help you access the best rates:

• Avoid retail bank markups: Traditional banks often operate on retail spreads of 200-300 basis points above interbank rates, while specialist modern providers like Airwallex typically offer much lower rates previously only available to large corporations.

• Time transfers around rate changes strategically: Monitor major economic announcements (ECB meetings or US employment data) that may cause volatility spikes and wider spreads. 

• Look for tools that offer mid-market or transparent rates: Choose platforms that display real-time interbank rates alongside their exact markup before you commit. 

• Hedge when appropriate for predictable exposures: Lock in today's exchange rate for future payments by using forward rates for known transactions. This could help protect you against unfavourable currency movements for predictable supplier payments or client invoices.

Our business money transfer guide provides more details on how to move funds across borders.

Common mistakes to avoid with foreign exchange

Not planning for currency volatility

Businesses often assume exchange rates will remain stable when budgeting for international expansion or supplier contracts. When rates move significantly, what looked like profitable deals can quickly become loss-making.

Invoicing in volatile currencies without protections

Billing clients in currencies like Turkish lira or Brazilian real could expose you to significant rate swings. Consider invoicing in euros, building currency clauses into contracts, or using hedging instruments to protect against adverse movements.

Overlooking hidden fee structures

Providers advertising "zero fees" or "no commission" typically embed costs through inflated exchange rates. Calculate the total cost by comparing their rate to the mid-market rate, not just looking at advertised fees.

Not tracking FX impact on margins

Small rate movements compound quickly across multiple transactions. A 2% shift in EUR/USD affects every dollar-denominated cost or revenue, but many businesses only discover this impact when reviewing quarterly results rather than monitoring it ongoing.

Check out our business money transfer guide for Dutch SMEs for a rundown on better alternatives to traditional banks.

How Airwallex helps Dutch businesses with fair FX

FX rates can impact your business costs and competitiveness. Understanding how they work is one thing; having access to competitive rates that let you capitalise on that understanding is another. 

Airwallex offers transparent rates at interbank plus 0.5-1%. Beyond our competitive rates, our multi-currency business accounts let you collect and hold 23 currencies, giving you control over conversion timing and reducing unnecessary costs, and you can pay out to 150+ countries at interbank rates.

As an end-to-end provider, Airwallex benefits extend beyond competitive spreads. Dutch businesses can also set up local currency accounts in 60 markets, eliminating collection delays and intermediary fees, and batch international payments for simultaneous payout.

Conclusion

FX rates will always fluctuate, but your approach to managing risk doesn’t have to.

Understanding how FX rates work and accessing fair pricing can turn what many businesses see as an avoidable cost into a competitive advantage.

Ready to reduce your FX costs? Open an Airwallex account today and start saving on international payments.

FAQs

Why is the FX rate I see online different from what my bank gives me?

The rate shown on Google or XE is the mid-market rate: the midpoint between global buy and sell prices. Most banks add a markup of 2–3% on top, which is where the difference originates. Specialist providers like Airwallex often apply smaller, more transparent spreads.

What’s the most cost-effective way for Dutch businesses to convert currencies?

Comparing providers is the fastest way to reduce FX costs. Banks typically use retail spreads, while modern platforms usually offer lower pricing and transparent costs before you convert. Holding foreign currencies can also eliminate unnecessary conversions.

When is the best time to exchange currency for international payments?

FX rates move throughout the day based on liquidity and market events. Converting during high-liquidity periods, usually overlapping EU/US trading hours, can reduce spreads, but it’s best to speak to a finance professional if you’re unsure. For regular payments, locking in pricing with forward rates can reduce some timing risk.

Sources and references

1 https://www.cnbc.com/2025/04/14/us-dollar-has-plunged-and-euro-soared-on-trump-tariffs.html