A good question.
Assuming the currency of the contract is in 'pounds sterling', then that woul be what is used to price the Activity Schedule, with the Prices being the sum total of all the activities.
The Price for Work Done to Date (PWDD) is the total of the Prices for each completed activity (or group), which is what the retention calculation in Option X16 uses.
Option X3 is essentially used where the Employer (Client) takes the risk for currency fluctuations for the items stated in Contract Data Part 1, up to a maximum amount, where they are paid for in another currency as calculated in accordance with the stated exchange rate.
These items, however, would be priced in pounds sterling within the Activity Schedule, presumably with tendered prices converted using the exchange rate stated in the Contract Data for option X3.
Consequently, as a retention calculation uses PWDD, which relates to the Activity Schedule as priced in pounds sterling, any payment under option X3 would not fall under the definition of PWDD and would, therefore, not affect any retention calculation under option X16.