Currency-driven

The adjective 'currency-driven' describes a situation, market, or strategy primarily influenced or dictated by fluctuations in the value of a nation's currency. It implies a strong sensitivity to exchange rates, where financial decisions, trade practices, and economic trends are largely determined by the strength or weakness of the local currency relative to others. This can impact investment choices, export competitiveness, import costs, and even consumer spending habits.

Currency-driven meaning with examples

• The company's expansion strategy became intensely currency-driven after the unexpected devaluation of the local currency. They had to rethink international pricing and sourcing strategies to maintain profitability. This shift caused significant adjustments in their budget, with the need to adjust their financial forecasts to incorporate the current FX (Foreign Exchange) rate's behaviour.
• The tourism industry in the country is highly currency-driven; a weaker currency makes it more attractive for international visitors. The devaluation of the local currency led to an influx of tourists but also a decrease in local purchases. The government is now concerned as it impacts how tourists plan on spending their vacation.
• Their investment portfolio was deliberately currency-driven, focusing on assets whose returns were highly correlated to specific currency valuations. They closely monitored economic indicators and central bank policies to anticipate changes. This strategy exposed the portfolio to significant risk when the global financial market became unstable.
• Trade negotiations between the two countries were largely currency-driven, with the focus on how exchange rate adjustments would affect the balance of trade. Each government sought to leverage currency fluctuations to gain a competitive advantage. This meant both sides were willing to intervene in the market.