We are growing year on year making significant changes to many companies and individuals in the way they exchange their foreign funds and, on a bigger scale, the way companies manage their exposure to the ever-changing currency market through risk management.

As mentioned in previous articles, larger FX companies, and especially banks, just don’t have the interest to treat their clients in same way as we do, we are the at the fore front of the new way to deal currency

If you have not been 100% happy with your bank or other who might be managing your currency transactions, then do give SW Foreign Exchange a call. I think you will be pleasantly surprised as to the different way we work and look after you. Enough about us what is happening in the market?

What is the outlook for the coming year?

So far, we have seen a strong start for pound sterling against the dollar, euro and most other major currencies, driven mainly by good investor sentiment and the expectations that no further Covid-19 restrictions will have to be put in place.

The pound has risen well against the dollar once again based on the lack of further restrictions and on the basis that the BOE is suggesting more interest hikes are likely over the first two quarters of 2022.

The euro is certainly still on the back foot with the pound knocking on the door of reaching 1.2, mainly due to fact that the ECB are still reluctant to look at any interest rate hikes of their own.

What is your currency strategy for 2022?

Is the beginning of the year the time to start to implement a new strategy? How have things worked for you in the last 12 months? Have you maintained the margin on deals done even though the market has been quite volatile? If not, why not?

The world of FX does not need to be complicated. All that needs to be done is to keep watch on currency flows within the company, but make sure that when each deal is done, any potentially negative movement in the market is counteracted with the appropriate action??

Is it time to change your supplier and move closer towards a more proactive and friendly operation.

How are the markets going to affect your business?

Who knows what is likely to happen in 2022. The hope, of course, is that Covid is now on the back foot and there are no more lockdowns to contend with. We have already mentioned the benefit we have seen in the value of the pound following a lack of lock downs so is there more to come and with the mention of interest rate rises?

Some in the market are predicting that if all goes well, we could see interest rates at 1% by year end.

As time goes by, we think that the GBP v EUR will definitely reach and move beyond 1.2, but how far is anyone’s guess and as far as we have seen, the pound staying above 1.35 is quite likely. However, we are still very much living through post-Brexit transport problems, but these will hopefully work themselves out.

Risk is managed for exactly the reasons we have mentioned. It doesn’t necessary matter where the market goes, within reason, if you are confident with your hedging strategy, so not to affect you profit margin.

To end with, I would like to wish you all a happy and prosperous new year.