Contact Us
Phone
+44 (0)1548 857009
Address
Britton House, Fore Street, Kingsbridge, Devon. TQ7 1NY
info@southwestfx.co.uk
Many companies we deal with in the past have come to us mentioning that they are running up losses on their profit and loss balance sheet due to the fluctuations in currency pricing from when they order goods from abroad to when they actually pay for the goods.
With the massive uncertainties we have all experienced in the currency market especially over the last 12 months, where we have seen the dollar and euro go from 1.33 to 1.1950 and 1.18 to 1.0720 respectively against sterling, it has always, for anyone been a difficult decision as to where the market might be heading.
From experience and from what we do for a number of customers is to very simply forward buy the required currency when the orders are made thus any downward value in GBP will not affect your margin, on the resale of the goods, and most importantly removes any loss that may then occur on your P and L management accounts .
Well you may add that the market might go in our favour, this is true but potentially with a number of invoices to settle, we find that the overriding sentiment, with such a volatile and uncertain market, is to fix the cost, make the margin you set out to and then not having to worry the whole time that more bad news will come from the Brexit negotiations and the demise of the pound will eat in to your profits.
However as we have seen in the last month and half the pound has strengthened dramatically, hopefully with expectations that the Brexit negotiations are going to bring an end to the uncertainly and new deals made now can benefit from the extended margin originally calculated. Just remember a well bought forward contract will always champion a good spot rate if the market goes against you.
If you are buying dollars especially please do not forget about the highly beneficial ‘fixed forward rates’ you can get on buying forward. Buying 3 months forward you can benefit with adding another 30 or so points to the spot rate.
If you would like to discuss anything in this article or especially strategies on forward buying then please do get in touch.
South West Foreign Exchange Ltd is an independent specialist foreign currency consultancy giving guidance and help to corporates and private individuals with regards to their foreign exchange transactions, we offer a local South West based service with global execution.
Address
Britton House, Fore Street
Kingsbridge, Devon
TQ7 1NY
Phone
+44 (0)1548 857009