From Ray Stannard of International Trade Financial Solutions
Two unrelated stories have featured heavily over the last week, but both are having a significant effect on the markets, so it’s better to look at them together here.
Reading the financial press and money men, what markets hate is uncertainty. So, what have we got – uncertainty regarding the next UK Government – we know who will it be, but will it be strong/resilient enough to deal with the economic problems, etc, etc and also significant fears over the state of the Greek (and, possibly, other southern Eurozone members).
Either on their own will cause headaches, but both together are really making things difficult for anyone who trades overseas – buying or selling. I am unable to give my thoughts on what will happen regarding exchange rates, as this is an FSA regulatory requirement and I decided some time ago not to seek formal FSA authorisation for what I do within ITFS. That said, it is something that every importer and exporter, or indeed, anyone who deals with foreign currency, must take notice of and ensure that they have a good relationship with whoever they use for their foreign exchange needs. FX dealers, by their very nature, are FSA authorised, and can discuss their views on where they think the market is heading. If your FX dealer does not do this, consider changing to one who does, and also gives good rates. I will happily put you in touch with some if you need a referral – just let me know.
The euro may be great for removing a plethora of currencies across Europe, but it also means that issues in one member country (eg Greece) will have an impact on all
of the other countries that use the same currency – ie the rest of the Eurozone. Therefore, you don’t need to be dealing with Greek counterparts to feel the effect.
Trading between UK and Belgium, to use an example, will also be affected by the rate. This seems to be a good time to remind you again of the dynamic currency converter on
my website; you can use this to track exchange rate movements as often as you like – very important at the moment. I used it myself to check on the Euro movements before my planned trip to Rome in April was aborted by the ash cloud! More seriously, please make sure that you have a grip on exchange rate movements before you commit; again, I’d be pleased to speak with anyone who needs to know the basic options that are available; their effects and what they mean for your business. Also, and don’t forget, once you know the basics, you are in a much better position to react more quickly in the future and retain more money as profit in your business.
Tomorrow: ‘Trade International Digest Interview’