Big Week For Currencies. Is Your Business Ready?
You don’t need to follow every central-bank speech. But if your business pays overseas suppliers or receives foreign currency, this week deserves a place in your diary.
The pound has support – but a big test ahead. Expectations of higher UK interest rates have helped sterling, while French debt concerns have weighed on the euro. Wednesday’s UK Budget could shift that balance, particularly if borrowing plans unsettle investors.
The dollar’s next move hinges on the Fed. Wednesday’s decision is expected to leave rates unchanged, but signals about December could move markets. Thursday’s US growth and inflation figures follow close behind. ING and HSBC remain broadly supportive of the dollar.
Euro and yen payments? Keep Thursday and Friday in mind. The ECB and Bank of Japan are also expected to hold rates. Their guidance on future increases could matter more than the decisions themselves.
Three dates to watch
- Wednesday 28 October: UK Budget and US Federal Reserve decision.
- Thursday 29 October: ECB decision, US GDP and PCE inflation.
- Friday 30 October: Bank of Japan decision.
What does this mean for your business?
A 1% exchange-rate move changes the sterling cost of a fixed overseas payment by roughly £1,000 for every £100,000 of exposure. That can quickly eat into a hard-earned margin.
Before the announcements, check your upcoming payments, the rate your budget needs and whether securing part of your requirement would give you more certainty.
You might not be in business to make money on FX. You certainly don’t want to lose your margin to it.
For a quote or a straightforward conversation about your next international payment, contact Oscar Galloni at Paytrex.
+44 208 634 7673