How much do exchange rate movements affect your business? Possibly, more than you imagine.
From the pound’s weakness last March to its recent, relative highs, the GBP/USD rate has moved almost 20%.
Movements of that scale can have a serious impact on your business.
Whether you sell your creative services around the world, import materials and components from China or – like a superyacht – operate an internationally mobile, multi-million-dollar business, you are exposed to the risk of foreign exchange rate movements.
If you manage music streaming revenues and royalties, on-location film crew or international jet charter then, in a volatile, globalised economy, not having a currency strategy can be a big gamble.
That’s why we’ve written our latest guide, How To Develop Your Currency Strategy.
In this free, 28-page guide, we describe the different types of currency risk that your business may be exposed to, and we take you through the steps to develop your own currency strategy:
1. Understanding how currency affects your business.
- The importance of your budget exchange rate
- Measuring the size of your business exposure
- The importance of sensitivity analyses
2. Assessing your business’s attitude and appetite for risk.
- Articulating the difference between attitude and appetite
3. Developing an appropriate strategy.
- Establishing your currency goals
- Understanding exchange rate forecasts
- Considering available tools
- Working with currency forward trades
4. The importance of continually reviewing and refining your strategy.
The guide includes examples, voices of experience and definitions of the most common currency terms, like spot trade, forward contract and limit order. There’s an introduction to our recently expanded currency desk team, too.
If you don’t yet have a strategy for managing your foreign exchange and currency risk, our guide could be a good place to start.
If your existing strategy needs a review (for example, when did you last review your budget exchange rate?) then you’ll find some useful pointers.