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Rethinking Relocation: The Ripple Effects of USD Volatility
A weaker dollar this year is reshaping the cost and experience of U.S. employee relocations, forcing HR and mobility leaders to rethink policies and protections.
What’s Fueling the U.S. Dollar’s (USD) Decline?
The USD index fell about 11% between January and June 2025 — its steepest first-half drop since 1973 — according to Morgan Stanley. They also forecast the dollar could weaken by another ~10% through end-2026.1
The Euro (EUR) to U.S. dollar (USD) exchange broke a fresh 4-year high near 1.188 as of September 18, 2025, and RBC Capital Markets believes that the EUR/USD rate will eventually strengthen to 1.24 by the end of 2026.2
When the USD is considered weaker in foreign exchange, individuals with a “stronger” currency can buy more U.S. products or, for example, pay less in tuition fees if they go to American universities.
But for global assignments and relocations, currency volatility between home and host locations can frustrate companies who want to ensure their expat employees are kept “whole” financially and insulated from hardship.
A depreciating USD means that U.S. employees working abroad receive less local-currency value for dollars earned or benchmarked at prior exchange rates. Costs like daily living, housing, and schooling — which are billed in local currency — become more expensive in dollar terms when the dollar weakens.1
Pay Options
The recent decline of the USD has caused concern for U.S. assignees paid in home country currency abroad, but delight for assignees paid in host country currency.
To help employees accept assignments abroad and help ensure they will not suffer financial hardships, some U.S. organizations today choose to pay expats on a split payroll system, an approach to protect against currency fluctuations where a portion of compensation is paid in the host-country currency (for local living expenses) and another portion in home currency (for savings, etc.). This can help buffer expats against exchange-rate fluctuations.3
However, of companies participating in Mercer’s International Assignment Survey3:
- 31% pay entirely in home country currency.
- 27% split salary between home- and host-country currencies.
- 23% pay entirely in host country currency.
The survey shows more companies prefer a home-country currency approach and this is backed up by NEI findings:
“Though split payroll is an option, most of our clients use home-based payroll for international assignments, valuing the consistency and control it provides across borders," says Mollie Ivancic, SVP International Services, NEI Global Relocation.
“After all,” says Ivancic, “if each time an employee was to change their salary split, the company's payroll department would need to update two different payroll systems and ensure proper reporting in both countries. This would create a significant and inefficient administrative burden, and increase risk of errors.”
NEI recommends companies consult an expert service provider to determine what works for one’s individual needs and culture and the amount of administration required for every option.
What Could HR & Global Mobility Leaders Do Differently?
Companies are taking a hard look at risk management strategies versus keeping an employee “whole” during an international assignment. There are also other areas companies could consider:
- Communicate proactively with expatriates so they understand how fluctuations will be managed, which portions of pay are fixed vs. variable.
- Clearly define which parts of compensation are exposed to currency risk and which are protected or guaranteed.
- Review COLA more than once a year: quarterly or semi-annual reviews are more responsive when currency markets are volatile.1 Rapid currency shifts can make annual COLA updates deficient. Employers offering COLA protection need to monitor both inflation and exchange rate changes more frequently to maintain real purchasing power for expatriates.1 Given the impact it can have on employees on international assignment, up to date information for higher cost of living and higher inflation locations is essential.
An Opportunity in Volatility
Currency fluctuations are likely to continue in the near future and their unpredictable nature will, by default, impact global employers sending employees across borders.
Though the USD’s devaluation presents challenges, it also presents opportunities.
Employers who adopt responsive policies — frequent COLA reviews, split-pay strategies, and transparent exposure to risk — not only protect their employees’ purchasing power, but could also gain a competitive advantage by being seen as equitable, adaptable, and trustworthy in the global mobility.
If you would like to discuss global relocation, mobility or talent management strategy trends, please contact your NEI representative any time.
About NEI Global Relocation
NEI Global Relocation (NEI), a certified Women’s Business Enterprise (WBE), partners with over 200 clients—including Fortune Global 100, Fortune 500, and Fortune 1000 companies—to deliver world-class global mobility and assignment management solutions. Headquartered in Omaha, Nebraska, with offices in Switzerland and Singapore, NEI helps companies transition employees smoothly across the globe.
NEI has consistently earned strong rankings in independent industry surveys, including the Trippel Nationwide Relocating Employee Survey and the Trippel Relocation Managers’ Survey, which highlight performance in both employee experience and client satisfaction. Recently, NEI has also been honored with multiple Gold Stevie® Awards, including recognition for , Z of the Year – Business or Professional Services and Customer Satisfaction at the International and American Business Awards. These accolades reflect NEI’s commitment to service excellence and its leadership in the global mobility industry.
Combining consultative expertise, benchmarking, trend analysis, innovative technology, and end-to-end relocation solutions, NEI empowers organizations to make confident global mobility decisions and deliver exceptional relocation experiences.
The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.
Sources
- Morgan Stanley. What is Fueling the Depreciation of the Dollar? August 21, 2025. The U.S. dollar lost ~11% in first half of 2025; forecasted additional ~10% decline by end 2026.
- RBC Euro To Dollar Forecast: EUR/USD To 1.24 By End-2026, 2027
- Mercer. Paying Expatriates: Understanding Split Pay. Data showing split, home-currency, and host-currency pay percentages among companies surveyed.
Rethinking Relocation: The Ripple Effects of USD Volatility
A weaker dollar this year is reshaping the cost and experience of U.S. employee relocations, forcing HR and mobility leaders to rethink policies and protections.
What’s Fueling the U.S. Dollar’s (USD) Decline?
The USD index fell about 11% between January and June 2025 — its steepest first-half drop since 1973 — according to Morgan Stanley. They also forecast the dollar could weaken by another ~10% through end-2026.1
The Euro (EUR) to U.S. dollar (USD) exchange broke a fresh 4-year high near 1.188 as of September 18, 2025, and RBC Capital Markets believes that the EUR/USD rate will eventually strengthen to 1.24 by the end of 2026.2
When the USD is considered weaker in foreign exchange, individuals with a “stronger” currency can buy more U.S. products or, for example, pay less in tuition fees if they go to American universities.
But for global assignments and relocations, currency volatility between home and host locations can frustrate companies who want to ensure their expat employees are kept “whole” financially and insulated from hardship.
A depreciating USD means that U.S. employees working abroad receive less local-currency value for dollars earned or benchmarked at prior exchange rates. Costs like daily living, housing, and schooling — which are billed in local currency — become more expensive in dollar terms when the dollar weakens.1
Pay Options
The recent decline of the USD has caused concern for U.S. assignees paid in home country currency abroad, but delight for assignees paid in host country currency.
To help employees accept assignments abroad and help ensure they will not suffer financial hardships, some U.S. organizations today choose to pay expats on a split payroll system, an approach to protect against currency fluctuations where a portion of compensation is paid in the host-country currency (for local living expenses) and another portion in home currency (for savings, etc.). This can help buffer expats against exchange-rate fluctuations.3
However, of companies participating in Mercer’s International Assignment Survey3:
- 31% pay entirely in home country currency.
- 27% split salary between home- and host-country currencies.
- 23% pay entirely in host country currency.
The survey shows more companies prefer a home-country currency approach and this is backed up by NEI findings:
“Though split payroll is an option, most of our clients use home-based payroll for international assignments, valuing the consistency and control it provides across borders," says Mollie Ivancic, SVP International Services, NEI Global Relocation.
“After all,” says Ivancic, “if each time an employee was to change their salary split, the company's payroll department would need to update two different payroll systems and ensure proper reporting in both countries. This would create a significant and inefficient administrative burden, and increase risk of errors.”
NEI recommends companies consult an expert service provider to determine what works for one’s individual needs and culture and the amount of administration required for every option.
What Could HR & Global Mobility Leaders Do Differently?
Companies are taking a hard look at risk management strategies versus keeping an employee “whole” during an international assignment. There are also other areas companies could consider:
- Communicate proactively with expatriates so they understand how fluctuations will be managed, which portions of pay are fixed vs. variable.
- Clearly define which parts of compensation are exposed to currency risk and which are protected or guaranteed.
- Review COLA more than once a year: quarterly or semi-annual reviews are more responsive when currency markets are volatile.1 Rapid currency shifts can make annual COLA updates deficient. Employers offering COLA protection need to monitor both inflation and exchange rate changes more frequently to maintain real purchasing power for expatriates.1 Given the impact it can have on employees on international assignment, up to date information for higher cost of living and higher inflation locations is essential.
An Opportunity in Volatility
Currency fluctuations are likely to continue in the near future and their unpredictable nature will, by default, impact global employers sending employees across borders.
Though the USD’s devaluation presents challenges, it also presents opportunities.
Employers who adopt responsive policies — frequent COLA reviews, split-pay strategies, and transparent exposure to risk — not only protect their employees’ purchasing power, but could also gain a competitive advantage by being seen as equitable, adaptable, and trustworthy in the global mobility.
If you would like to discuss global relocation, mobility or talent management strategy trends, please contact your NEI representative any time.
About NEI Global Relocation
NEI Global Relocation (NEI), a certified Women’s Business Enterprise (WBE), partners with over 200 clients—including Fortune Global 100, Fortune 500, and Fortune 1000 companies—to deliver world-class global mobility and assignment management solutions. Headquartered in Omaha, Nebraska, with offices in Switzerland and Singapore, NEI helps companies transition employees smoothly across the globe.
NEI has consistently earned strong rankings in independent industry surveys, including the Trippel Nationwide Relocating Employee Survey and the Trippel Relocation Managers’ Survey, which highlight performance in both employee experience and client satisfaction. Recently, NEI has also been honored with multiple Gold Stevie® Awards, including recognition for , Z of the Year – Business or Professional Services and Customer Satisfaction at the International and American Business Awards. These accolades reflect NEI’s commitment to service excellence and its leadership in the global mobility industry.
Combining consultative expertise, benchmarking, trend analysis, innovative technology, and end-to-end relocation solutions, NEI empowers organizations to make confident global mobility decisions and deliver exceptional relocation experiences.
The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.
Sources
- Morgan Stanley. What is Fueling the Depreciation of the Dollar? August 21, 2025. The U.S. dollar lost ~11% in first half of 2025; forecasted additional ~10% decline by end 2026.
- RBC Euro To Dollar Forecast: EUR/USD To 1.24 By End-2026, 2027
- Mercer. Paying Expatriates: Understanding Split Pay. Data showing split, home-currency, and host-currency pay percentages among companies surveyed.
Rethinking Relocation: The Ripple Effects of USD Volatility
A weaker dollar this year is reshaping the cost and experience of U.S. employee relocations, forcing HR and mobility leaders to rethink policies and protections.
What’s Fueling the U.S. Dollar’s (USD) Decline?
The USD index fell about 11% between January and June 2025 — its steepest first-half drop since 1973 — according to Morgan Stanley. They also forecast the dollar could weaken by another ~10% through end-2026.1
The Euro (EUR) to U.S. dollar (USD) exchange broke a fresh 4-year high near 1.188 as of September 18, 2025, and RBC Capital Markets believes that the EUR/USD rate will eventually strengthen to 1.24 by the end of 2026.2
When the USD is considered weaker in foreign exchange, individuals with a “stronger” currency can buy more U.S. products or, for example, pay less in tuition fees if they go to American universities.
But for global assignments and relocations, currency volatility between home and host locations can frustrate companies who want to ensure their expat employees are kept “whole” financially and insulated from hardship.
A depreciating USD means that U.S. employees working abroad receive less local-currency value for dollars earned or benchmarked at prior exchange rates. Costs like daily living, housing, and schooling — which are billed in local currency — become more expensive in dollar terms when the dollar weakens.1
Pay Options
The recent decline of the USD has caused concern for U.S. assignees paid in home country currency abroad, but delight for assignees paid in host country currency.
To help employees accept assignments abroad and help ensure they will not suffer financial hardships, some U.S. organizations today choose to pay expats on a split payroll system, an approach to protect against currency fluctuations where a portion of compensation is paid in the host-country currency (for local living expenses) and another portion in home currency (for savings, etc.). This can help buffer expats against exchange-rate fluctuations.3
However, of companies participating in Mercer’s International Assignment Survey3:
- 31% pay entirely in home country currency.
- 27% split salary between home- and host-country currencies.
- 23% pay entirely in host country currency.
The survey shows more companies prefer a home-country currency approach and this is backed up by NEI findings:
“Though split payroll is an option, most of our clients use home-based payroll for international assignments, valuing the consistency and control it provides across borders," says Mollie Ivancic, SVP International Services, NEI Global Relocation.
“After all,” says Ivancic, “if each time an employee was to change their salary split, the company's payroll department would need to update two different payroll systems and ensure proper reporting in both countries. This would create a significant and inefficient administrative burden, and increase risk of errors.”
NEI recommends companies consult an expert service provider to determine what works for one’s individual needs and culture and the amount of administration required for every option.
What Could HR & Global Mobility Leaders Do Differently?
Companies are taking a hard look at risk management strategies versus keeping an employee “whole” during an international assignment. There are also other areas companies could consider:
- Communicate proactively with expatriates so they understand how fluctuations will be managed, which portions of pay are fixed vs. variable.
- Clearly define which parts of compensation are exposed to currency risk and which are protected or guaranteed.
- Review COLA more than once a year: quarterly or semi-annual reviews are more responsive when currency markets are volatile.1 Rapid currency shifts can make annual COLA updates deficient. Employers offering COLA protection need to monitor both inflation and exchange rate changes more frequently to maintain real purchasing power for expatriates.1 Given the impact it can have on employees on international assignment, up to date information for higher cost of living and higher inflation locations is essential.
An Opportunity in Volatility
Currency fluctuations are likely to continue in the near future and their unpredictable nature will, by default, impact global employers sending employees across borders.
Though the USD’s devaluation presents challenges, it also presents opportunities.
Employers who adopt responsive policies — frequent COLA reviews, split-pay strategies, and transparent exposure to risk — not only protect their employees’ purchasing power, but could also gain a competitive advantage by being seen as equitable, adaptable, and trustworthy in the global mobility.
If you would like to discuss global relocation, mobility or talent management strategy trends, please contact your NEI representative any time.
About NEI Global Relocation
NEI Global Relocation (NEI), a certified Women’s Business Enterprise (WBE), partners with over 200 clients—including Fortune Global 100, Fortune 500, and Fortune 1000 companies—to deliver world-class global mobility and assignment management solutions. Headquartered in Omaha, Nebraska, with offices in Switzerland and Singapore, NEI helps companies transition employees smoothly across the globe.
NEI has consistently earned strong rankings in independent industry surveys, including the Trippel Nationwide Relocating Employee Survey and the Trippel Relocation Managers’ Survey, which highlight performance in both employee experience and client satisfaction. Recently, NEI has also been honored with multiple Gold Stevie® Awards, including recognition for , Z of the Year – Business or Professional Services and Customer Satisfaction at the International and American Business Awards. These accolades reflect NEI’s commitment to service excellence and its leadership in the global mobility industry.
Combining consultative expertise, benchmarking, trend analysis, innovative technology, and end-to-end relocation solutions, NEI empowers organizations to make confident global mobility decisions and deliver exceptional relocation experiences.
The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.
Sources
- Morgan Stanley. What is Fueling the Depreciation of the Dollar? August 21, 2025. The U.S. dollar lost ~11% in first half of 2025; forecasted additional ~10% decline by end 2026.
- RBC Euro To Dollar Forecast: EUR/USD To 1.24 By End-2026, 2027
- Mercer. Paying Expatriates: Understanding Split Pay. Data showing split, home-currency, and host-currency pay percentages among companies surveyed.
