FX: Businesses must manage currency risk as volatility continues
27 November 2017
Daniel Harden, Head of Dealing Desk, Global Reach Partners
Stormy weather lies ahead in post-Brexit Britain
On 23 June 2016, when the UK electorate opted to leave the European Union, the Pound fell dramatically in value by nearly 20 per cent against other major currencies. While this has created some positive opportunities for UK-based businesses, for many it has been highly detrimental to their profitability and continues to present a significant risk going forward.
With the Pound remaining volatile, while the UK Government makes slow progress in its Brexit negotiations with the EU, this situation is unlikely to change soon. In the meantime, it is essential for British businesses trading internationally, to ensure they have a robust foreign exchange (FX) risk management strategy in place to help them weather the economic storm expected in the upcoming months.
Clear advantages of working with an FX specialist
Businesses that work with an FX specialist are better equipped to make more informed decisions with regards to their foreign currency transactions. In contrast to most banks, an FX expert will provide a proactive and service-led approach, offering guidance based on their understanding of a business’s strategic goals and specific exposure to risk.
Global Reach Partners operates with a deep understanding of the currency market, including how this is impacted by current affairs, political events and economic data announcements. This is a crucial element to managing currency risk, especially in times of heightened market volatility when planning ahead is essential.
New era lies ahead
As the UK navigates its path towards leaving the EU, one thing remains certain: uncertainty is coming. With a potential shift away from the Euro-zone trade, both opportunities and risks could present themselves to UK businesses, making longer-term FX planning and risk mitigation a necessity.
Have you considered how Brexit may impact your business? Click here to download a guide on Navigating Brexit, written by Global Reach Partners.