Moneycorp - Top Five Tips To manage foreign exchange risk post-"Brexit"
Following the Referendum result on 23rd June, Sterling has weakened by 11% against the euro and 15% against the dollar. For companies trading internationally, fluctuating exchange rates can be difficult to manage and hard to budget for. Market volatility may erode or even eliminate profits and in a time of tighter margins and increasing raw material costs it is ever more important to protect yourself from exchange rate risk and make savings wherever possible.
1. Plan for risk
Planning is the first step to managing your FX risk, and agreeing on a budgeted exchange rate for the year will guide your transactions. An FX specialist can help to define this rate, enabling you to protect yourself from any potential adverse fluctuations.
2. Access your payments on the go
You need to ensure you can react quickly to changes in the markets, and manage your payments effectively in or out of the office. Your free-to-access Chamber Foreign Exchange account will allow you to trade online in multiple currencies 24 hours a day, as well as provide access to your own personal dealer.
3. Ensure you are getting the best rates
You want to be certain you are accessing the best rates in the most currencies, and also avoid any hidden payment charges along the way. Chamber Foreign Exchange leverage off the £22bn they trade annually to secure some of the most competitive rates in the market.
4.Fix the exchange rate
With your policy in place it is time to review the FX tools that you can use to manage your exposure. Spot contracts, Forward contracts and market orders can work individually or together to form a tailored foreign exchange strategy. Based on your budgeted rate, requirements and timing, your FX dealer will work with you to form a strategy to best suit your business needs.
5. Take information from the most reliable sources
All Chamber Foreign Exchange Dealers are MSTA (Members of the Society of Technical Analysts) qualified. As experienced market traders they will use their expertise to ensure your company receives the best information and guidance on the markets, getting you the best solutions for your business needs.