You are partly right. I just put something for € 106.56 in my basket and started the paypal payment process. In the past, the charge would appear in USD and Paypal would helpfully offer to charge my card in €. When doing the math, it was about 4% higher than the interbank rate (my CC company only charges 0.1% on top of the interbank rate). Now they changed the optics, so the Paypal charge is really in €.This isn't correct, when I set the currency to EUR I get charged in EUR.
Now comes the catch: Those € 106.56 are $ 114.99 as of right now. When I change the currency in my Aliexpress account, the article drops to $110.14, so Aliexpress was taking $ 4.85 or 4.2% for these pretty optics. Of course, they are paying most of this to Paypal.
So you are really better off paying in USD. Most CC charge 1.5 to 2% for foreign currency conversion (so still less than 4.2%), but there are some out there that charge next to nothing.