southwestforeignexchange

Q1 review: Ongoing political, economic and financial events affecting your currency prices?

tim@southwestforeignexchange.co.uk (Tim Sheehan) — Fri, 21 Mar 2025 11:24:46 GMT

As we approach the end of the first quarter of 2025, a lot has happened in the foreign exchange (FX) market, most of this has been driven by economic policies, geopolitical events, and especially a new US president.

Economic policies affecting FX strategies

The European Central Bank (ECB) has reduced its deposit rate by 100 basis points, equal to 1%, to 3.0% during 2024, with markets anticipating further cuts in 2025 to support the eurozone economy.

The Bank of England also lowered its bank rate by a total of 50 basis points or 0.5% to 4.75% through two rate cuts, reflecting a cautious approach amid mixed economic signals. The Bank of England has tended to follow the US’s Federal Reserve with its interest rate cuts.

The Fed has maintained the federal funds rate of 4.50%. The most recent rate adjustment was made on December 18, 2024, when we saw a 25 basis point or 0.25% cut. There have been no cuts so far this year, but two more are anticipated before the end of 2025.

As far as the two most popular FX cross currency pairs in the UK, the GBPUSD and GBPEUR, you can see clearly what the effect has been from ongoing political, economic and financial events. How have these currency prices affected you and your business and what you have done about it?

First up the US dollar. We have seen big swings in the marketplace, certainly brought on by the expectation of President Trump at the beginning of January followed by unpredictable economic and trade policies that have raised concerns among investors about the potential negative impact on the US economy.

Other major economies have shown resilience and growth, making their currencies more attractive relative to the dollar. For instance, the British pound recently climbed above $1.30 for the first time since November, bolstered by persistent inflation in the UK and perception that the Bank of England may delay interest rate cuts.

Gains for importers and exporters

What have importers and exporter gained from these movements? Hopefully, if they have followed the trend, exporters would have waited until obvious signs that the dollar was strengthening following Trump coming to office and potentially hedged themselves, selling the dollar hopefully in the low $1.20s. There was talk that parity might be on the cards, but it never did materialise.

Once the weakness of the dollar emerged, exporters quickly jumped in and it was for the importers to then see what rise there would be. Around $1.25-$1.26 was always going to a good level to buy in on and if the dollar weakened further, as it did, then extra profit could be taken the next time around.

Now for the euro. Compared with the dollar, as far as volatility is concerned - the percentage difference between how high and low the dollar got, known as the range - we haven’t seen as much movement. In percentage terms, the range of the USD 7.40% and the euro 3.05%.

The escalating trade tensions between the EU and the US have significantly impacted the euro's value. Recent threats of tariffs from the Trump administration have heightened market uncertainty, leading to fluctuations in the EURUSD exchange rate. This has affected the value of the euro against the pound.

Basically, the euro's movements in 2025 have been driven by EU/US trade tensions, shifts in German fiscal policy, and expectations surrounding ECB monetary policies.

What have importers and exporter gained from these movements of the pound against the euro?

In the months leading up to the New Year, there was very little volatility was very small so any decision to hedge was potentially taken on above or below the 1.20 mark but only short term. Importers who hedged were happy when they saw the euro strengthen up until Trump came in. This was potentially the sign for exporters to hedge themselves and make a couple of cents of currency profit while keeping their prices competitive.

With such small percentage movement, we certainly did not see as much hedging as with the USD, but at least the volatility of the market has been almost best for both worlds and given both importers and exporters the opportunity to do something or nothing.

If, however, you did not hedge at all within this period, then it might be something to look at in the future. It is important to remember, you are never going to get your forward hedges right all the time, but it is much better to talk them out and manage your risk successfully than never hedge at all. it does not matter how good or tight your spot margin is. If you have forward bought or sold and the market moved the right way, then your well bought forward will always be better that your tight margined spot.

For any business, the volatility of the market is especially important to those of you operating in the international marketplace; more so if you are handling foreign currencies on a daily basis. There really does not need to be any risk involved if positions, deals, and purchases are covered and short-term profit realised.

If you would like to discuss any strategy mentioned in this blog or anything else about FX management then, please do give us a call. There is no obligation. It is just a free chat about what could be achieved.

Consider your banking and foreign currency requirements to reduce fraud risk

Mon, 14 Oct 2024 15:25:46 GMT

Fraud very much seems to be the buzzword in the market right now and we are here to help.

As of October 7, 2024, payment service providers (PSPs), including South West Foreign, have to adhere to rules issued by the Payment Systems Regulator stating PSPs must fully reimburse victims of authorised push payment fraud up to a value of £85,000.

This means that if, for whatever reason, funds we send out on your behalf end up in the wrong account due to fraudulent activity, then up to £85,000 can be reimbursed by you, subject to certain criteria being met.

Following this announcement from the regulator, there have been various articles in the press regarding fraud incidents that have taken place, mainly involving the major banks and those other organisations that don’t verbally communicate with their clients. If you use a company for any type of money transfer or exchange that doesn’t communicate by telephone personally, then we would advise you not to use them.

FX companies and fraud

I agree with other FX companies in believing this fraudulent activity could have been prevented if greater communication had taken place between the parties and more care was taken to ensure the destination of funds was bona fide and correct.

The reason for these types of fraud lies mainly with those parties who, when setting up new beneficiaries, do not take the necessary steps to eliminate fraud. So many of them do not have any verbal contact with their clients and certainly do not have the one-to-one relationship that we offer to make sure fraud does not occur.

We, at SWFX, through 15 years of operations and having made thousands of payments, have not once had a fraud claim lodged against us for loss of funds. The reason for this is, firstly, good communication and, secondly, we educate all our clients in making sure that the details they pass us are bona fide by asking them to verbally verify them with their suppliers to guarantee they are correct.

We stress the word VERBALLY. There is no point, when receiving new banking information, to verify it via email as the fraudster is usually using that exact communications platform. They can tap into email streams and change the bank details on an open email or even change the bank details on an attached PDF invoice making it all look very legitimate.

No matter how or who you are communicating with, it is always essential that you verbally verify the bank information sent to you to make sure it is correct before you send any money to anyone. This is the only way to mitigate fraud and this is what we make sure all our clients do before we verify the same information with them.

Making overseas payments?

If fraud is an issue for you or your company and you are making a small or large number of domestic and/or overseas payments, then we can help you. Not just by making payments but also offering a full foreign currency exchange and risk management service to make sure you are risk and fraud free.

You also will have access to our multi-currency virtual IBAN accounts that are integrated directly into our foreign exchange services. That means you can manage, maintain and distribute funds in up to 39 currencies from one single account.

As we all know, fraud is everywhere these days and even though sometimes we are advised not to speak to people we don’t know or to give too much information to an unknown source, we like to think we have at least a few of those bases covered. Communicating, sometimes daily, with our customers helps both parties get to know each other well and makes sure that we are a familiar voice on the phone able to help and assist whenever possible.

If anyone would like to discuss the range of services we have on offer we are, of course, available to speak with on 01548 857009 or do drop us an email on tim@swfx.co.uk and we will call you back.

Tearing down the barrier of foreign exchange for UK import and export businesses

tim@southwestforeignexchange.co.uk (Tim Sheehan) — Tue, 04 Jun 2024 12:17:52 GMT

Governments are always keen to put a shine on any situation, especially if they believe positive results have been the product of a policy they have pushed through Parliament. Meanwhile, the opposition party will always find a few negatives to dull the shine. That’s politics in all its glory and we saw evidence of this in the recent UK trade performance debate held in the House of Commons.

The Secretary of State for Business and Trade Kemi Badenach was keen to point out the advantageous results following the Brexit referendum, hailing the UK as the fourth biggest exporters in 2022, overtaking Japan, the Netherlands and France in process. She also stated the value to UK exports equated to £862 billion in the 12 months up to February 2024.

Badenach said: “That builds on progress we have made in growing our exports outside the confines of the EU.”

And went on to say: “Today, we are selling not only more services to EU countries than ever before, but record amounts of services to the rest of the world, too.”

Her statement celebrated the export success of the financial and insurance industry, plus UK manufacturers, but I invite you to read the full statement and responses to it here to get the full picture.

For example, the Alan Brown, SNP MP for Kilmarnock and Loudoun, came back with claims that: "Volumes of UK goods imports and exports are 7.4% smaller than in 2018 - the biggest five-year decline for which comparative records exist.”

Liam Byrne, Labour MP for Birmingham, Hodge Hill, countered with: “The Office for National Statistics figures show that our goods exports have fallen by about £31 billion over a year.”

Of course, the Secretary of State had answers to all negative comments thrown her way, but I wonder how it feels for the import and export businesses at the coalface. Are they enjoying opportunities in the 73 countries that have made trade deals with the UK? As always in business, the bottom line is always the bottom line. Has it been better or worse for your business since Brexit?

Meanwhile, Badenach claimed: “We are tearing down the barriers to trade.”

Sure, the trade deals achieved under the Conservative reign should assist import and export businesses but are there hidden barriers that are holding them back from making more profit?

Considering the trade barrier of foreign exchange services

It will not surprise you to learn that I think foreign exchange (FX) services are a hidden barrier that is not really spoken about or even really understood by many businesses. It is an element of trade that is seemingly just handed over to the banks, which always elicits an audible groan from an independent service provider like us.

In truth, banks make me cross. The exchange rate will often not be the best and the fee will be inflated, this reduces your all-important potential profit margin. Moreover, the customer service will be virtually non-existent too.

Treasury management service

All import and export businesses work extremely hard when entering international marketplaces, so we work with you to make sure the hard work you have put in doesn’t go to waste by getting uncompetitive exchange rates and not getting the proper treasury management service you need.

We understand the intricacies of money exchange and operate on a very personal, one-on-one basis to make sure our customers are looked after and given every opportunity to benefit from intelligent buying and selling of foreign funds to save them money.

FX services for import and export businesses

We are very aware that FX services are offered over the phone by over-enthusiastic salesmen and women promising amazing exchange rates, but these promises are very often very short lived when they come to trade, as they realise that making no profit from a trade doesn’t really work.

Instead, we form long-standing relationships that create trust with fair and transparent pricing. We don’t bash the phones looking for every lead possible but work closely with referred clients to make sure they get the services they need for all their currency exchange management.

While the politicians can bandy around the trade numbers at will and parties can interpret them to suit their arguments, I am more interested in the individual businesses that make up those figures. I am interested in making them more money from trading the same way but with better foreign exchange support on board.

We’d be delighted to hear from any import and export business that is looking for a change to their current supplier and wants to tackle the barrier of foreign exchange with our help. We are not going to create a race to the bottom on pricing, as that never works in practice, but we believe we can offer you an overall service that is a lot better than most on the market right now.

Currency hedging and the benefits of unique IBAN numbers

tim@southwestforeignexchange.co.uk (Tim Sheehan) — Mon, 18 Mar 2024 14:48:00 GMT

Currency hedging is a risk management strategy used by investors and businesses to mitigate the potential losses or volatility stemming from fluctuations in currency exchange rates. It is particularly crucial for businesses or individuals engaged in international trade, investment, or any financial transactions involving multiple currencies.

Currency values can fluctuate significantly due to various factors. Political, economic and financial indicators and announcements are the most common which, in turn, can heavily impact one currency against another.

Another important factor that has been prevalent in the last year or so is, of course, interest rate movements of a particular currency. This can affect values significantly bearing in mind the return gained on a currency with a higher interest rate.

Currency risk in the international marketplace

Businesses spend a lot of time and effort entering the international marketplace so if you are either making outward payments as an importer or receiving foreign funds as an exporter, it is imperative that you evaluate at what point within your supply chain are you exposed to currency risk. There is no point whatsoever in setting up overseas supply chains and not keeping an eye on the potential risk. Businesses are not set up to lose money but by not hedging, there is a good chance you will.

Currency fluctuations can also introduce uncertainty into cash flows. Currency hedging allows companies to stabilise their cash flows by fixing exchange rates for future transactions, thereby providing greater predictability and reducing the risk of unexpected currency values.

Benefits of a forward contract

A forward contract is the mechanism which allows businesses to buy or sell a set amount of currency, based on the live market rate at that time, for a particular date in the future. In short, you can secure a rate today in readiness for a transfer or exchange in the future knowing exactly what the exchange rate will be.

These contracts can also be used as a form of funding based on reserving an amount of purchased currency but, of course, not having to pay for it until the maturity date. The only outlay of funds would possibly be a securitisation deposit, if required, but this would be only a deposit, part payment of the contract. Please ask for more details.

These maturity dates can be fixed out to as much as 24 months in the future but generally, due to the markets being so volatile, it doesn’t always make too much sense in committing too far in the future.

Currency accounts for exporters

If businesses deal with multiple currencies, it is particularly important to hold currency accounts in the different currencies you might have dealings with, especially being an exporter. You want to be able to have overseas funds sent directly to an account in your company name, for you to be able to decide when to exchange that money, or to use it to settle a forward contract, and not have it arrive at your bank in to one of their ‘slush accounts’ for them to exchange, normally into sterling, at whatever exchange rate they choose. This is the worst scenario for a company as their bank will make the exchange at the worst rate, sometimes at a cost of around 4% of the value of the incoming funds.

Virtual IBAN

What SWFX also offers is an account for you to pay direct foreign currency in to and to exchange it when you wish. This is done through what we call a ‘digital wallet’ which is basically a facility to manage and distribute funds in more than 38 currencies from one single account using a a virtual IBAN and SWIFT code, integrated directly into our foreign exchange services and global payments infrastructure.

In our view, hedging and forward contracts really are an important factor while trading overseas and dealing with a raft of different currencies. Just buying and selling your currency on what is called the spot market can lead to losses and lack of profit. If deals are fixed at certain prices, i.e. exchange rates, then using forward contracts allows you to insure your profit rather than gamble it on the market hoping it goes in your favour.

It doesn’t matter how good the spot price is, it will never beat the exchange rate of a well purchased forward contract if the market has subsequently moved against you.

There are strategies for buying these contacts depending obviously how risk adverse you are. Please do make contact. We are here to help you. Please call on 01548 857009 or email tim@swfx.co.uk .

Is a bank really more convenient for foreign exchange services if it costs you more money?

tim@southwestforeignexchange.co.uk (Tim Sheehan) — Tue, 27 Feb 2024 12:15:38 GMT

We give private individuals the power to make foreign currency payments at far more favourable exchange rates than their bank or others are willing to offer. We hear about too many transfers being made through the individual’s bank for reasons of convenience and possibly lack of time but that only really results in increased cost and worse exchange rates.

Foreign currency payments for private clients

Whatever your international money transfer or payment is for, we have the experience to offer every possible advantage when buying or selling currency. We fully understand your exposure to the ever-fluctuating currency market and make sure you are set up to pay and receive funds as competitively and efficiently as possible.

We can help you with any transfer or exchange you might want to make anywhere in the world. We do NOT deal with holiday cash, but for any other account to account transfer you need, we can make sure you get the best exchange rate possible for the service we offer.

Setting up an account with us is very quick and easy and the facility to deal with us is ready in a day.

How does our private client FX service work?

When opening an account with us, you will automatically get access to a ‘digital wallet’ which is basically a virtual IBAN account integrated directly into our foreign exchange services and global payments infrastructure. You will now no longer need to hold separate currency accounts as this will allow you to maintain, manage and distribute funds in more than 38 currencies from one single account.

You will find the experience of dealing with SWFX very different than dealing with your bank or large foreign exchange company. We can guarantee that you will receive the best care. No more impersonal lack of service!

We know banks can be difficult to deal with, bad communicators and sometimes lack specific knowledge. We are experts in the foreign exchange field and take the time to ensure you have a full understanding of the different contracts available to you.

We will always save you money, if we can, as we always offer rates of exchange that will be very competitive and fairer than using your bank or other service provider. We can buy foreign currency at the same market rate as banks, but basically take less profit for ourselves.

Call me today to see what a difference we can make: 01548 857009 or email tim@swfx.co.uk

Considering foreign currency payments as part of your business strategy?

tim@southwestforeignexchange.co.uk (Tim Sheehan) — Wed, 23 Aug 2023 13:20:39 GMT

With the last four months of the year approaching fast, and hopefully seeing positiveness coming out of the markets, why not start afresh in September and look more closely at your currency strategy?

Change management, business management and cost reduction companies are often an important part of the strategic process adopted by modern-day organisations. Whether they are contracted to write a strategy, deliver on one that has been unfulfilled or to evaluate where improvements can be made, these consultants are tasked with making a positive contribution, with cost reduction a key element.

Where do FX services fit into your business strategy?

It does not matter if you are writing or delivering these strategic plans, one of the areas we would urge these business experts to look at is foreign exchange and the cost of international money transfers.

If your business is involved in any sort of international trade or the movement of international money then the likelihood is that they will be involved in the exchange of foreign funds and this means dealing with currency risk every day, which can have a dramatic effect on your bottom line.

Often businesses will simply turn to their bank, but with no real help in the hedging of currency risk, least of all if you are an SME, many of these companies will forfeit the chance to hedge and be safe.

Benefits of using foreign exchange companies

This is an area when business management and change management consultants can immediately help their clients save and make more money in collaboration with foreign exchange brokers, like SWFX.

We continuously work with businesses to help best manage this risk and produce a positive outcome rather than ending up with a foreign exchange loss on their profit and loss each year.

We charge nothing for us to analyse what improvements can be made and to identify where sometimes huge amounts of money can be saved. Please do not hesitate to contact us to discuss your FX needs. We are the experts in this field, not the banks, so please let us help you cut costs and increase your profit margin.

The convenience and simplicity of universal IBANs for corporate and personal clients

tim@southwestforeignexchange.co.uk (Tim Sheehan) — Mon, 22 May 2023 07:34:27 GMT

Are you in need of a foreign currency bank account in the UK but have been refused one through the normal channels?

South West Foreign Exchange Ltd is changing the way a lot of companies operate by offering multi-currency bank accounts, coupled with a potential need for foreign currency exchange services.

Enter the universal IBAN (international bank account number). This is a powerful tool that simplifies financial processes for both corporate and personal clients. South West Foreign Exchange Ltd recognises the significance of this development and aims to shed light on the convenience and efficiency it offers.

With universal IBANs, the process becomes far more seamless. By assigning a unique identification number to each of 39 separate currency accounts, regardless of the bank or country, the IBAN system ensures accurate routing and identification of funds during transactions. This eliminates the need for extensive manual intervention, reducing errors and delays.

With more companies and private individuals being prevented from opening multi-currency accounts with their bank, we have taken the lead in offering this service to help in various ways:

Clients no longer have to open individual currency accounts to receive foreign funds
Clients have more control over the exchange of foreign funds as receiving them before into their banks without the relative currency account; this enables the funds to be transferred direct to the correct currency account without automatic conversion at an unfavourable exchange rate which tends to happen with most banks
All foreign funds can be kept in secure accounts until you wish to exchange either into another currency or of course net them off and make payments in the same currency.
All accounts will be in the name of either you personally or the name of your business.
With funds already in your accounts, with us, transfer or exchange happens immediately
No cost at all if you do not use the accounts
If you have a requirement to make mass payments and exchanges then enhance usability on a comprehensive online platform is available to all

As South West Foreign Exchange Ltd understands, the introduction of universal IBANs revolutionises global banking by providing a unified approach to international transactions. Whether it's corporate clients seeking streamlined processes or personal clients aiming for hassle-free transfers, the IBAN system offers a standardised and efficient solution.

The convenience, transparency, and enhanced security of universal IBANs make them an essential tool for navigating the complexities of the global financial landscape.

If you would like to find out more about what we have to offer, then please do make contact.

International trade needs foreign exchange services to enjoy better profits

Tue, 03 May 2022 08:43:03 GMT

In my latest blog, I will discuss the importance of using foreign exchange services if you are importing or exporting goods to and from the UK.

The main reason most businesses enter the international marketplace in the first place is to find new markets once the UK’s has become saturated, but if they do not pay attention to foreign exchange, they will not reap the maximum profits available to them.

The cost of goods for importers and the cost of your goods for exporters is dictated by the price of pound sterling or GBP compared to the currency you are either buying or selling. The whole journey into the foreign market is unrewarding unless you are very careful and have a currency strategy that protects your margins to make you profit.

Amid all the useful advice on the wider commercial implications of international trade and insights into the global trade environment, why isn’t more attention paid to foreign exchange and risk management?

Pay attention to foreign exchange and risk management

Competitive margin rates are vital to successful businesses. The more competitive the exchange margin, i.e. the difference between the interbank rate and the exchange rate you actually get, the better your exchange rate will be, the more competitive your business will be, and the more your profits will grow.

Businesses entering this international marketplace often turn to their banks for these services as long-standing relationships are already in place and it seems the logical place to start, but invariably this is not always the best option.

Should you use your bank for foreign exchange services?

Independent companies, like SW Foreign Exchange , offering full treasury management services exists because they consistently offer more competitive pricing and can offer the additional help and guidance international trade businesses might need.

They can offer you the benefit of their knowledge and every possible advantage in the ever-fluctuating currency market to make sure you are set up to complete secure transactions as efficiently and quickly as possible.

They will also potentially take more care over your overall requirements. Most will offer a one-to-one service to make sure you are aware of all the different contracts available to avoid currency risk.

International trade businesses need foreign exchange advice

Currency exchange can be a minefield and it is where several companies become unstuck. However, if you were bold enough to enter the overseas market to make more money, then don’t be afraid to seek operational advice if you are uncertain about how foreign exchange services can benefit you.

We see this as the vital element. New and experienced importers and exporters alike should have a clear understanding of the basic procedures and good practices. Having a currency strategy is so important and margins are vital, so be bold and compare these independent companies to what your bank is charging and see if they can make a difference. It will cost you nothing, but could make all the difference.

If you need our help for your first foray into international trade or if you are an experienced import and export business that wants to fine tune your currency management, please do not hesitate to me.

Is now the time to purchase that property abroad that you always wanted?

Fri, 25 Feb 2022 11:03:26 GMT

From the back end of last year and the beginning of 2022, SW Foreign Exchange Ltd has seen a big rise in enquiries for those wishing to purchase properties abroad. We have seen clients from all over the UK come to us to assist in the buying and the selling of properties around the world.

The reason for their contact is that we can offer an overall service which could save them a lot of time and a value of between 2-3% on the price of their property. Very simply, we buy or sell currency on your behalf at a much more competitive rate than banks are willing to offer. We all know banks are impersonal, difficult to deal with, bad communicators and lack specific knowledge.

They certainly are not experts in this field…we are.

From Australia to Mallorca, from Hong Kong to London, from Tenerife to South Africa, people come to us to manage and handle the exchange of their foreign funds from and to any currency required. We also work with them strategically, introducing them to the intricacies of the FX market and being your ears and eyes on the market to make sure that everything is in place for you to benefit from a positive swing in the value of the currency you are spending.

More and more recently, with the increasing value of the pound and the restrictions due to COVID-19 being lifted, we have seen an upsurge in the enquiry level of properties being purchased in Europe and especially in the Alps. With the bonus of negative interest rates in Europe, currently at -0.5%, there are some good mortgage deals to get as well, some under 1% and for a fixed term.

If you are looking to purchase an overseas property, please do make contact sooner rather than later even if it is just at pipedream level. We can help you to assess what your budget, let say in GBP, will be against another other currency, so giving you an idea of what you can afford.

We will give you all the information you require on exchange rates, buying processes, any fees and costs, currency contracts, etc., without having to ‘register’ with us. You will deal with the same person from start to finish, with no passing you around from person to person to complete your transactions.

As many people have found out, we operate like no other company. Here’s just another satisfied customer purchasing an overseas property:

“South West Foreign Exchange made what could have been a complex transaction very easy. They saved us several thousand pounds with a very competitive exchange rate and everything happened on time. I would highly recommend the company and Tim for working closely with us.”

Call us today for a chat, nothing more, see what we can do for you.

An introduction to 2022 and to SW Foreign Exchange

Tue, 11 Jan 2022 11:03:25 GMT

Is it time to make changes?

SW Foreign Exchange is a currency broker. We are a gateway between you and a financially-regulated currency firm or your bank to make sure that any one-off or regular foreign exchange transactions are executed in the right manner. Our aim is to ensure you do not end up being between a rock and a hard place and have the ability to look elsewhere for the execution of your transactions.

We are growing year on year making significant changes to many companies and individuals in the way they exchange their foreign funds and, on a bigger scale, the way companies manage their exposure to the ever-changing currency market through risk management.

As mentioned in previous articles, larger FX companies, and especially banks, just don’t have the interest to treat their clients in same way as we do, we are the at the fore front of the new way to deal currency

If you have not been 100% happy with your bank or other who might be managing your currency transactions, then do give SW Foreign Exchange a call. I think you will be pleasantly surprised as to the different way we work and look after you. Enough about us what is happening in the market?

What is the outlook for the coming year?

So far, we have seen a strong start for pound sterling against the dollar, euro and most other major currencies, driven mainly by good investor sentiment and the expectations that no further Covid-19 restrictions will have to be put in place.

The pound has risen well against the dollar once again based on the lack of further restrictions and on the basis that the BOE is suggesting more interest hikes are likely over the first two quarters of 2022.

The euro is certainly still on the back foot with the pound knocking on the door of reaching 1.2, mainly due to fact that the ECB are still reluctant to look at any interest rate hikes of their own.

What is your currency strategy for 2022?

Is the beginning of the year the time to start to implement a new strategy? How have things worked for you in the last 12 months? Have you maintained the margin on deals done even though the market has been quite volatile? If not, why not?

The world of FX does not need to be complicated. All that needs to be done is to keep watch on currency flows within the company, but make sure that when each deal is done, any potentially negative movement in the market is counteracted with the appropriate action??

Is it time to change your supplier and move closer towards a more proactive and friendly operation.

How are the markets going to affect your business?

Who knows what is likely to happen in 2022. The hope, of course, is that Covid is now on the back foot and there are no more lockdowns to contend with. We have already mentioned the benefit we have seen in the value of the pound following a lack of lock downs so is there more to come and with the mention of interest rate rises?

Some in the market are predicting that if all goes well, we could see interest rates at 1% by year end.

As time goes by, we think that the GBP v EUR will definitely reach and move beyond 1.2, but how far is anyone’s guess and as far as we have seen, the pound staying above 1.35 is quite likely. However, we are still very much living through post-Brexit transport problems, but these will hopefully work themselves out.

Risk is managed for exactly the reasons we have mentioned. It doesn’t necessary matter where the market goes, within reason, if you are confident with your hedging strategy, so not to affect you profit margin.

To end with, I would like to wish you all a happy and prosperous new year.

Selling a property abroad? Be aware of the pitfalls that could cost you a lot of money

Fri, 04 Jun 2021 10:12:02 GMT

With 20 years’ experience in helping clients exchange the proceeds from an overseas property sale, there are various workings and insider deals we think you should be aware of to prevent additional costs being incurred and suggestions on good working practices.

Estate Agents. – Obviously whoever you choose make sure they have a good reputation in the area and don’t be afraid of asking for a reference from an independent source. Agree the fee before anything is signed off and get a good idea of how the flow of funds is going to work and what additional fees will be charged, not just ‘might’ be charged.

Estate Agents will have a raft of different service suppliers to assist you during the selling process but it will be always to their benefit. From solicitors to currency companies your agent will recommend you to use various companies as they, the agent, will more often than not be paid a commission from each one for the introduction. By all means take them on board but always compare with others and make your own decisions. Don’t be over sold on to using one or another.

A Solicitor, Agent or Notaire should be able to transfer the proceeds of your house sale to any account of your choice upon completion. However, be aware that since the UK left the EU the fees charged for processing these payments can vary significantly and it is always advisable to check these first. It might be wise to speak to your bank or ask one of the above three to confirm if their own bank has a policy of charging extra for payments outside the EU. This can apply on both the sending and receiving end, and as it is often calculated as a percentage of the sum being transferred the costs can be enormous for a house sale – sized amount.

At the end of the day it all goes towards getting your euros, or any other currency, to an account which you can then exchange at the best rate possible. This is where we come in to help you. As mentioned earlier, the agent will introduce you to a currency exchange company, they will encourage you to use them as they will, on average, receive 50% of the revenue made on exchanging your money, thus the company really will charge you as much as it can get away with to make up the difference.

DO NOT register with any currency company until you are 100% happy with the fees and service they are going to offer you, i.e. the margin, otherwise you could end up being charged as much for exchanging your money as the agent fees. Compare companies, make an effort to ‘ring around’ it will save you in the long term. The majority of currency companies will not give you any information, help or guidance until you have registered, if this the case ignore them, go somewhere else, if you can get a water tight independent recommendation from someone you know then all the better, but still always negotiate on the margin charged.

Currency companies that talk about ‘indicative rates’ are not to be trusted; this is a tactic for them not to commit to a specific rate and force you to register before they will actually quote you an accurate exchange rate that they will stick to. One more pit fall might be the very attractive exchange rates you will be quoted to encourage you to register in the first place. Please please don’t be fooled by these rates and register, as those employees you speak to at the beginning are often there solely to bring you on board by quoting very competitive rates, and get paid to do so. If you do register we can guarantee that those rates can be very different from those genuinely available when you eventually get to speak to a Dealer at the company.

Margins are how much currency companies make from exchanging your funds and are declared normally in % terms. It is very difficult to say what is a good deal due to the fact that deal sizes change and currency dealers are incentivised by their companies to make as money as they can, so be on your guard.

All companies work in very different ways, just be sure that the one you choose can be trusted to give you a good deal.

We would be delighted to discuss with anyone, who is going through the process of either buying or selling a property abroad, any of the points we have highlighted in this article.

Are you doing everything to protect yourself against fraud?

Thu, 22 Apr 2021 10:15:12 GMT

Increasingly, we are finding fraudsters are becoming more and more persistent and clever in the way they go about their illegal business. Being on the financial frontline where these types of fraud can take place, we are always as vigilant as possible to prevent it.

Very simply, fraudsters will more than likely hack into your email to intercept a conversation stream that involves the movement of funds and will try to disrupt and re-route the funds to a bank account under their control.

These fraudsters operate all over the world and can hack into the safest email networks to steal funds. Firstly, they will recruit people into a scam (like a “work at home” opportunity) and end up acting as money mules. They will then withdraw the money enticing the mules with a percentage of the ill-gotten gains.

Even if by then you have reported it to the bank, it is almost impossible to trace the funds and unless you have some sort of insurance to recoup the losses, such as a Cyber Liability Policy that specially includes cybercrime. In most cases though, the funds are lost for ever.

How to prevent hacker losses:

When receiving an email for the first time from ANY company or individual, you must always call the intended recipient of your funds on their recognised telephone number and confirm with them the bank details they have sent you.

If you are sending funds to a recipient regularly and then receive an email from them advising of a change of bank details, then once again before sending anything, you must confirm by telephone that the email has come from them and then verbally confirm the amended bank details.

Never, obviously, confirm by email as you are just confirming with the fraudster!

These measures might sound obvious, but it is most important that every new company or individual that you transfer money to, even if you have their invoice with logo on, must be verified. These fraudsters will produce fake invoices with the names and addresses you recognise to con you out of your funds.

Never trust anyone until a verbal confirmation has been made. Always go to the enth degree to make sure you are sending your funds to the correct account.

If you wish to discuss any part of this blog, then please do get in touch with www.swfx.co.uk

Did exporters react quick enough to protect themselves from a stronger pound?

Tue, 09 Mar 2021 11:21:39 GMT

Ever since the welcoming news that a Brexit deal was agreed in December, we have seen, as you can see below, that the pound has risen in value against the euro and the dollar. We have seen movements on the euro from 1.1050 to 1.1706 a rise of 5.94% and on the US dollar from 1.3550 to 1.4235 equating to 5.05%.

This has been a welcome revaluation of the pound against both currencies, as several analysists have said that the pound has been undervalued for a while and it is slowly moving back to where it should be. These exchange rates we have not seen for many months, to be exact since the 16 April 2018 on the USD and 20 Feb 2020 on the Euro. There is a lot to be said for a strong currency. If we were allowed to travel abroad, our spending money would go further. A stronger currency usually reflects a stronger economy and a better outlook compared with peers. How long might it take for the rest of Europe catch up and are we going to see a rebound.

However, with vaccine mania running through the veins of the UK, there is talk throughout Europe that this rise in the value of the pound is short lived and this constant growth will slow down; they were proved right. We have certainly seen both currencies come off their highs for the two-month period, so will we see these currencies stabilise for, at least a while, at these levels until the rest of Europe catches up with the UK’s very successful vaccine programme.

What can we expect in the future? This weeks’ budget didn’t really come up with too many surprises and thus the market has been very subdued. What has your experience been during these first two months? What help and guidance have you been getting from your bank or currency provider to help you through this period?

As exporters, did you sell currency before the pound rose in value? As you will be aware, as the pound rises, the value of the goods that are bought for dollars, euros or any other currency, are worth less when translated back into sterling, which can have a serious effect on your profit margins.

We have seen a lot of exporters cautiously watching the market and hedging themselves against the pound getting any stronger. Have you done this already or do you need some help to see what your options are?

Once again, not protecting your foreign income from a more expensive pound is always going to reflect on your bottom line. We can provide very simple and effective ways for losses to be nullified.

We come across many businesses that would benefit from the type of guidance and currency services we can offer. We could save them thousands of pounds in exchange rates and help them to handle, on a daily basis, their currency exposure and for a much more competitive price than their banks charge. Where most of the time their banks are offering no help or information at all, we offer a full treasury function for those working in the international marketplace and have the need to exchange foreign funds.

We ask ourselves every day, why aren’t these companies accepting our offers for help? We know we can make a difference to their bottom line almost immediately and can work with them to form a long-term strategy to negate currency risk.

Don't waste any more time and money, give SW Foreign Exchange a call today and see what we can do for you and your business. We operate unlike any other company who profess to do the same as us. We are set up primarily to put our clients first and to make a real difference.

What is your strategy this year for the buying and selling of currency for your business?

Thu, 04 Feb 2021 11:40:32 GMT

Focusing mainly on the movement of GBP against the euro and the US dollar we have been bombarded with a realm of factors which were an uncertainty last year, but now seem to be more decided. It has to be said that the pound, since the turn of the beginning of 2021, has slowly but surely increased in value against the two major markets. Some would say this is unsurprising.

The dollar chart above shows effect from the American elections and since the ever-increasing debate of Deal or No Deal has been put to rest, finally, we have seen, the dollar’s trading range between 1.3450 and 1.3760 since the beginning of the year. Is this good for you or not?

‘No Deal’ nerves were very evident in the run up to the final deal at New Year. Very sensibly on the import side, we saw the consolidation of margins being secured throughout November and December as the rates got better and individual targets were reached, with the never-ending chance that a no deal would become a reality. Consequently, on the sell dollar side, i.e. exporters, we saw a lot of clients protecting their dollar income by forward selling positions with the chance that the dollar could end up nearing the 1.4 level.

Whatever was done seems to have worked out reasonably well for all. A Brexit deal was done which eradicated a huge amount of uncertainty in the market but the pound didn’t reach some of the highs that were expected due, mainly to the Covid situation and the lock-down which began on January 5th. Both buyers and sellers of dollars have seen the market move maybe predictably but not too much either way as to be unhappy with their hedged positon.

Now on to the euro.

The strength of the pound against the euro did focus more on the toing and froing of the Brexit deal continuously during the two-month period before the end of the year. It was always going to be a last-minute decision, but throughout December especially, the uncertainties did have a sometimes unnerving atmosphere of what the end result really was going to be.

No Deal nerves, as with the dollar, certainly were evident but I think the market was never really likely to go extremely one way or the other as the small print of the deal and Covid still hung heavily over both the UK and the EU.

Buyers and sellers were equally cautious. Euro buyers weren’t really too fussed about forward buying but did have stop losses at the ready just in case a no deal became a reality. Thankfully for them, it didn’t. Recently, the strength of the pound or weakness of the euro hasn’t quite got to the level worth fixing in at.

Sellers were slightly more proactive hoping to get in to the market, in part, if the rate was attainable below the 1.10 level, but mainly rode out the decision and accepted forward selling at the slightly higher rate once the decision came through.

All in all, volumes of trades were obviously taken in-to account based on how the deal would pan out and whether there would be ‘business as usual’ starting the New Year

What is your strategy for 2021? What is your ever present exposure to the currency markets? Are you dealing in any other currency, not just GBP, USD and EUR, but all major currencies?

What change are we in the UK going to see in the next month or so as the Covid vaccine gets rolled out and the economies and businesses get back up and running?

The UK seems to be the country leading the vaccine race. Will this have a major positive effect on the pound?. If so, are you prepared for a possible 1.20 Euro and 1.4+ dollar in the coming months?

Did you end up with a currency loss on your P/L balance sheet last year?. If so why? We can work closely with you to negate such losses and make sure all deals end with a profit margin.

Please do get in touch if you wish to discuss anything about this blog or would like to discuss your companies hedging strategy.

What has the last month brought us and did we have in place the tools to combat it?

Thu, 01 Oct 2020 10:07:34 GMT

The elephant still in the room is of course Brexit and the markets are looking in anticipation for hopefully a deal to come out of the EU.

In a very simplistic way some have seen that covid-19 might act as a benefit to the UK as the whole of Europe is slowly, hopefully, beginning to recover from this this pandemic and each country is starting to rebuild its economy. No matter which side of the channel you sit the emphasis on ‘getting back to normal’ has to be every country’s priority and hopefully the negotiators for the EU will see that the UK is a country that the rest of Europe wants and needs to do business with, in order to recover, and won’t over anxious about their memoirs in a few years’ time.

So what have we seen on the markets in the last month? The pound against the dollar has fallen from highs of 1.3480 on the 1st September to lows of 1.2680 on the 25th, how has this affected your business in terms of buying or selling currency? We can also see, below the pound against the Euro for the same period, with highs of 1.1277 on the 3rd September and lows of 1.0764 on the 11th, a movement of 4.76%.

Any importer or exporter would have found this period of time quite challenging, either hoping to second guess what to do next or to follow closely what the market was likely to do and was it time to hedge for the coming months.

Whatever your strategy all the elements such as Covid, Brexit and the US elections coupled with domestic fears of growing debt and a second wave winter outbreak made decisions difficult but please remember you are not currency traders but business people running successful companies so as long as the currency you do buy covers the cost of your products and services and you have hopefully made your required margin you have achieve what you set out to do.

However what lessons have you learnt if you have not succeeded as you would wish?

Do you have a proactive treasury function within or outside your organisation which fulfils this role?

Were you kept in touch by your accounts department or currency supplier to keep you advised of such movements in the market, or did the beneficial levels pass you by?

What lessons can be learnt from the highs and lows of all currencies over the period?

We believe that the treasury function within companies does not necessary need to be over complicated, as long an eye is kept on the market and there is a strategy in place then margins and profits can be sustained.

Where are the currency markets today? And what is the outlook for the next month or three?

Tue, 28 Jul 2020 10:16:47 GMT

Pound sterling remains to be under pressure and undervalued against the Euro and will continue to be show restricted strengthen against the US dollar generally until a post-Brexit trade deal is hopefully agreed around October time.

The Dollar last week had one of the worst trading weeks seen for a long time, with President Trump continuing battle with the US media, China, the corona virus and local governors there was little hope for traders hanging on the dollar.

Over the last week and in to this we have seen the dollar weaken to levels not seen since the second week in March. Is this the time to forward buy on the dollar for the short term? i.e. for the next three months exposure, and lock in your profits? The exchange rate of 1.3 is the target for a number of companies but with a six cent loss in a week some feel that now is the time to act as the right level to start to hedge to prevent being caught up in a rebounding market.

Sentiment towards Sterling remains subdued primarily on the basis that the EU and UK remain unable to reach a post-Brexit trade deal, which must be agreed by year-end if the two economic areas are to avoid defaulting to trading on WTO terms.

Nothing seems to be changing this week in regards to the value of the pound which is stagnated and found itself halted by a strengthening Euro which has resulted in the exchange rate throughout most of last week hovering around 1.0950 to 1.10. One blessing is that at least we have not seen the pound weaken further against the Euro which just shows the artificial strengthen of the Euro and the untapped potential of the pound. Should the Brexit trade negotiations produce a deal we could well see the GBP/EUR exchange rate jump to 1.2 by the end of the year!

Importers and exporters out there is it time to act before you miss out on the possibilities of securing profits before the tides change? Many are reacting to the weakness of the dollar without guaranteeing that we will see the move to 1.3 and those dollar sellers are quickly protecting themselves against further weakness if not done already.

The Euro, being more stable, is not at the moment forcing anyone’s hand to protect profits or costs either way, however I would urge exporters to keep an eye on things, if we are able to secure a deal in Europe, as said previously, you would want to be on the back end of a 9% swing.

We acknowledge that there a lot of companies out there who get very little insight to the currency markets through their banks and unless the volumes traded are substantial get little or no help with strategies to buy and sell and secure profit or income.

We deal with any sized company big or small, happy to help anyone to improve their knowledge of the markets and to explain how hedging currency contracts work.

If there is anything you wish to discuss in this report or if you are exposed to the currency market, in not just EUR, USD and GBP, but other currencies as well, please do make contact.

Using foreign funds to purchase UK property on a rapidly moving market

Wed, 22 Jul 2020 10:21:48 GMT

The recent increase in UK property purchases has been attributed to urban flight following the outbreak of COVID-19 and the temporary cease on stamp. People have also been seeking and buying second homes while far flung holiday destinations are out of reach. This is a subtitle for your new post

Coastal properties especially have been popular with families moving out of cities and towns as businesses look at home working as a long-term option, thereby negating the need for their employees to live near commuter routes, and, of course, for holiday homes.

A significant number of UK property purchases have been conducted using privately-held foreign currency funds. No matter where these funds have originated from, there is sometimes a compelling reason to use this available money due to the, in some cases, the weak value of the pound.

The benefit of using foreign funds is that even though the GBP cost of a UK house will not change, other than through negotiations, the cost of buying an amount of GBP in any foreign currency, might well alter and thus the amount of your overall spend is reduced. This, of course, can work against you and the price can rise.

However, this model can only work if you are able to obtain a very competitive exchange rate at the time the market moves in your favour. An alarming number of people will still go to their respective banks for exchanging such funds, and even those banking with some of the exclusive private banks, will be over charged when the exchange takes place.

We can help you in two ways.

Firstly, we can offer a far better exchange rate than other foreign exchange providers, especially banks.

Secondly, we can be your eyes and ears on the current market and make sure that everything is in place to benefit from a positive swing in the value of the currency you are spending.

The exchange rate savings we can make can be anything up to 2-3% of the value of the property and by taking on board a currency swing of 1-2%, your chosen property suddenly becomes cheaper…at least by the amount you might be paying in fees, if you are selling as well.

Having 20 years’ experience of buying and selling property for clients all over the world, we have seen great benefits from positive currency market movements when clients have been able to move quickly and fix a price on the required funds. Properties are moving very fast right now so moving quickly is key!

We are here to make sure they have a full understanding of the currency market, the different contracts available and the chance to be as profitable as possible.

So if you are looking to purchase a property in the UK with foreign funds, or for that matter a property overseas, then please do give us a call today and see how we can help.

Where is the pound today and what can we expect in the coming months?

Wed, 13 May 2020 10:27:25 GMT

Since the start of lock down and having seen a dramatic reduction in the value of the pound, when we saw the lowest levels against the dollar and euro of 1.1492 and 1.0511 respectively, we have predictably seen a welcomed bounce back to highs of 1.2640 and 1.1525 but no more.

This bounce back has from then remained in a 2-4 cent, on both currencies, trading range, very much dictated by the severity of COVID-19 in the United Kingdom.

We now seem to be entering the faze of whichever country or economy recovers from the effects of the virus the quickest and can get their economies up and running again will have the advantage or disadvantage of their currency strengthening as a sign of the start of green shoots of recovery and things getting back to normal.

The British Pound is now the worst-performing major currency of the past day, week and month according to data, as multiple pressures start to build on the UK currency in the form of trade negotiation uncertainty, Bank of England policy and the country's slow exit from lockdown.

In the past weeks we have seen the pound strengthen on the back of improvements in the stock market but this is not a given in the future as fresh fundamental drivers will take hold.

Some of these triggers came from the BOE suggesting that more easing will be needed in due course and all options are under review to deliver this. From a currency market perspective, comments on interest rates are perhaps the more interesting as said cutting interest rates into negative territory "would potentially do more harm than good".

The fundamentals continue to focus on the UK’s lockdown-easing plans and the state of EU/UK Brexit transition talks. It has been stated that a hard Brexit in becoming increasing likely as as negotiations between Britain and the European Union have stalled.

The UK and EU have this week begun the penultimate round of negotiations aimed at securing a provisional agreement ahead of the July European Council meeting, at which it must be determined whether an extension be granted to extend trade negotiations.

All in all it is very difficult to predict where the value of the pound will be in the coming months as we have to contend with Brexit and well the already slowing down of the UK economy.

Why is the pound so weak against almost all other currencies?

Wed, 18 Mar 2020 15:27:02 GMT

The British pound has seen further negativity in the past 24 hours and based on the overwhelming mood in the global financial markets, it is difficult to see anything changing anytime soon. Some analysts are saying that the markets are on course to meet lows which could only have been predicted if there was a hard Brexit.

Be aware that volatility goes two ways though: what goes down often goes up, and often quite sharply. So, while the pound has taken an absolute hammering against the euro and dollar this month, we must add a disclaimer early on that it is heavily oversold and could provide a sharp bounce back at any point.

During the week so far, we have seen some upside to the pound following various announcements from Government and the Treasury, with the latter arranging £330 billion of guaranteed loans to be made available to UK businesses. This, they hope, is just a safety net if the outbreaks get any worse.

As when writing this, the pound-to-euro exchange rate is quoted at 1.0843 down from 1.2065, 11.26% from a month ago. The dollar in a similar way has dropped from 1.3189 to 1.1880; a similar 11% since the 9th March. This all make pretty grim reading but, as mentioned earlier, a bounce back at any time is quite possible.

The pound sell-off has been phenomenal over this period, which I don’t think anyone in the financial markets could predict and, unfortunately, the chances are that things could get even worse. The reason for this is the expectations that the Bank of England will introduce a fresh batch of quantitative easing to support the UK financial system and out of all currencies, the pound is at most risk of quantitative easing owing to the currency's substantial reliance on the inflow of global investor funds.

There are a lot of ifs, buts and whens throughout the market and I think that with the hope that this virus is containable, the economy of the UK can return to what it was as fast as it fell.

With China supposedly over the worse of it and very little outbreak reported in Russia and Africa, it is always hopeful of a return to normality soon. In the meantime, the markets are what they are. It is something we have to live with and with little control over. Most importantly, stay safe and let us all come through this in one piece.

Treat foreign exchange costs the same as your other business overheads and bills

Tue, 18 Feb 2020 15:25:28 GMT

The advent of comparison websites has seen a shift in the way individuals and businesses purchase their services. Long gone are the days of paying the same gas board for years on end. People now seek out the best deal for their energy, water, car and home insurance bills and so on.

Businesses, too, adopt the same attitude. Bottom line is everything, so if you can make some savings, the finance director and the rest of the board will be happy. Utilities, telecoms, insurance, recruitment, IT support, etc…. there are savings to be had but the same scrutiny is rarely given to foreign exchange. Believe me, I know!

Foreign exchange is a perpetual blind spot. It seems it is just too much of an upheaval to shop around for these services and yet there are very real savings to be made and an improvement in customer service to be gained too.

If I sound frustrated, it is because I am. Many businesses I speak to are still using their banks, potentially blissfully unaware of their inflated fees. If you don’t know what currency margin you are on then you are being over charged!

Banks have changed. Personal service has been replaced with online services and fewer high street branches. The relationship that was once enjoyed between bank manager and a company FD has been stretched to nonexistence and there certainly isn’t any scope for negotiating a better price.

This means businesses will be paying over the odds for a better service they could get cheaper elsewhere. Unfortunately, there isn’t a convenient comparethefxmarket.com comparison website available to businesses but getting a free quote from an independent supplier is hardly a hardship either.

There are real savings to be made from moving away from traditional banks and shopping around for FX business services. You will gain transparent fees and better exchange rates. You will also benefit from improved customer service with regular contact with the same expert, who will take time to understand your business and its needs.

If you would like to benefit from our brand of unbiased guidance, I am more than happy to explain the way we work, introduce our FCA-authorised partners to you and give you a free consultation on how we could save your business, sometimes a lot of money.

Do make contact with Tim Sheehan 01548 857009 or email tim@southwestfx.co.uk

What can we expect from the start of 2020?

Wed, 29 Jan 2020 15:22:58 GMT

Following the ever volatile status of the pound over the last three months of 2019, with possible Brexit deals and elections, we have finally found a modicum of stability, well at least, since the election a dollar trading above the 1.29 level and the Euro consistently above 1.16.

This compared with previous months has been a great improvement for importers and something for the buyers of GBP to become slightly cautious of.

From the somewhat predictable election highs of 1.35, on the dollar we have seen, over the last month, the somewhat stable consistent achievable buy rates of above 1.30 which has given many companies the chance to execute fixed or open forwards generally above this level.

Euro buyers have again benefitted also with consistency above 1.16 but with chances above 1.17 and more recently 1.18 to pay some of those pre-Christmas bills.

Is all about to change?, with an imminent Brexit are we going to see this as positive news, coupled with a very undecided Bank of England, as foreign exchange traders reduce exposure to the currency ahead of a too-close-to-call decision on interest rates due on Thursday.

The pound has been at its most volatile in recent days as markets adjust for a decision either way. On such a close call this is exactly what will surprise the market thus create an opportunity for either the buyer or seller.

If you are uncomfortable with your currency position in the market then it is always best to at least do something. By buying or selling forwards you are not always going to get it right but to protect your margins is always a sensible option. Once markets have moved you can at least adjust things for the next deal but not the ones you have priced already.

If you are not getting the help or guidance you think you need then do contact us on 01548 857009 or email info@southwestfx.co.uk

Happy New year, from everyone at South West foreign Exchange Ltd.

Pound has largest daily jump since March on the hope that there is a solution to the Irish problem and hopefully Brexit as well?

Fri, 11 Oct 2019 14:32:09 GMT

Even though we have seen the largest rise in the value of the pound since March as a possible deal on the Irish side of things seems possible the markets remain cautious as there is still a long way to go to snatch a Brexit deal ahead of the October 31 deadline.

The Pound-to-Euro exchange rate advanced 1.91% to 1.1306 on Thursday, its highest level of the month; but we note that the currency is still trading still short of year's highs located towards 1.18. Friday morning bought further gains for the pound with the Euro slumping to 1.1380.

As far as the dollar is concerned we saw markets rise 1.84% from 15.00 on Thursday afternoon to 1.2452 by 18.00. So far this morning we have seen further moves up through 1.25 to the highs of 1.2540.

Who knows how more the pound has to move on this news and will it be the start of the final solution of Brexit, or will we see the pound bubble burst, as we saw in mid-September and the market rebound back to levels which we have become somewhat accustomed to.

Importers – Is this the time for you to benefit from this positive movement in the pound and maybe tie yourselves in to a month or two, or grin and bear it and hope it is the final movement up and solution that I think the country has been waiting for.

Exporters – With any appreciation of the pound like this it is always difficult to predict any short or long term outcome but most of all it is important to protect your margins especially if deals are already done and there is a possibility of profit dwindling away.

We are always on hand to give as much help and guidance to any company who is unsure about their current situation or what might be the best action to take. If you are not forward hedging either way you are always be going to leave yourself open to currency fluctuations like we have seen over the last 24hrs and with potential losses which might become irreversible.

Remember, don’t expect to get your forward buying correct every time, if you do, give up your day job and become a currency trader and you will make a lot of money, but to do something will at least tie in your profit long or short term and guarantee a consistent margin.

If you think we can help please do get in touch.

Have you got a loss on your P/L balance sheet from your currency transactions? If so, there is a way round this

Fri, 20 Sep 2019 14:33:59 GMT

Many companies we deal with in the past have come to us mentioning that they are running up losses on their profit and loss balance sheet due to the fluctuations in currency pricing from when they order goods from abroad to when they actually pay for the goods.

With the massive uncertainties we have all experienced in the currency market especially over the last 12 months, where we have seen the dollar and euro go from 1.33 to 1.1950 and 1.18 to 1.0720 respectively against sterling, it has always, for anyone been a difficult decision as to where the market might be heading.

From experience and from what we do for a number of customers is to very simply forward buy the required currency when the orders are made thus any downward value in GBP will not affect your margin, on the resale of the goods, and most importantly removes any loss that may then occur on your P and L management accounts .

Well you may add that the market might go in our favour, this is true but potentially with a number of invoices to settle, we find that the overriding sentiment, with such a volatile and uncertain market, is to fix the cost, make the margin you set out to and then not having to worry the whole time that more bad news will come from the Brexit negotiations and the demise of the pound will eat in to your profits.

However as we have seen in the last month and half the pound has strengthened dramatically, hopefully with expectations that the Brexit negotiations are going to bring an end to the uncertainly and new deals made now can benefit from the extended margin originally calculated. Just remember a well bought forward contract will always champion a good spot rate if the market goes against you.

If you are buying dollars especially please do not forget about the highly beneficial ‘fixed forward rates’ you can get on buying forward. Buying 3 months forward you can benefit with adding another 30 or so points to the spot rate.

If you would like to discuss anything in this article or especially strategies on forward buying then please do get in touch.

Don’t let pride get in the way of getting a better foreign exchange deal

Tue, 03 Sep 2019 14:35:51 GMT

Most of us are familiar with the process of shopping around for our house or car insurance, energy providers, etc. The advent of price comparison websites has seen us swap between providers to make sure we are saving money for the year ahead. This thrifty approach seems to be applied at business level for most financial products….but it is definitely not a regular habit for businesses that require foreign exchange services.

In the same way as people fondly refer to the “water board” when they are talking about their water supplier, we seem to apply the same nostalgic aura to our banks. But banks have changed. Whereas your bank manager would invite you in for an interview to ensure they got to know you before offering you a loan, most financial products can be applied for with a few clicks of the mouse.

While this seemingly more convenient way of doing business may appeal to some, it means the duty of care between provider and customer is often lost, and there isn’t an opportunity to scrutinise fees and rates on a one-to-one basis. Gone are the days of haggling too!

The result is that fees and margins have crept up while customer service has suffered. You are paying more and getting less!

And then there is pride. We all suffer from it. There may be a niggling doubt in your mind that you could be getting a better deal somewhere else, but you have backed your bank for so long that you cannot bear to be proved wrong.

Whether its pride, workload, loyalty or nostalgia, the unfortunate truth is that you will usually get a better deal if you seek out an alternative provider.

In the case of foreign exchange, I know a provider like us will give you a better a deal with transparent fees and better exchange rates. That means your business will save on costs and potentially make more money too. We will also take time to understand your business and make sure that one of the most important factors of foreign exchange is covered which is risk management.

Most banks will either scoot around the subject of forward buying, or not mention the benefits at all, with the fear of their client getting it wrong. We will give you unbiased help and guidance to make sure a comprehensive plan is in place over a period of time.

As well as that will get the one-to-one customer service you are paying for. You will be able speak to or email the same person time after time. They will get a clear understanding of how your business works and what its foreign exchange needs are. You will build a relationship with them.

I understand that we are all busy, but are you too busy to save money? Or is pride just getting in the way of a better deal?

We are more than happy to explain the way we work to you, introduce our FCA-authorised partners to you and give you a free consultation on how we could save your business money and plan for the future which at the present time is very uncertain.

Please do make contact if you think we can help.

Using foreign funds for the purchase of a UK property

Tue, 02 Apr 2019 14:37:23 GMT

With the international marketplace we find ourselves in today, more and more UK property purchases are or can be purchased using privately-held foreign currency funds.

No matter where these funds have originated from, there is a sometimes a compelling reason to use this available money due to the somewhat weak value of the pound compared with some of the major currencies nowadays held in offshore or domestic accounts.

The benefit of using foreign funds is that even though the GBP cost of a UK house will not change, other than through negotiations, the cost of buying an amount of GBP with, for example Euros, might well alter and thus the amount of your overall spent is reduced. This, of course, can work against you and the price can rise.

Where we can help is twofold.

Firstly, we can offer a far better exchange rate than other foreign exchange providers, especially banks.

Secondly, we can be your eyes and ears on the market and make sure that everything is in place to benefit from a positive swing in the value of the currency you are spending.

We are here to make sure they have a full understanding of the currency market, the different contracts available and the chance to be as profitable as possible.

So if you are looking to purchase a property in the UK with foreign funds, or for that matter a property overseas, then please do give us a call today and see how we can help.

Make foreign exchange a part of your business strategy

Wed, 13 Mar 2019 15:38:46 GMT

Change management, business management and cost reduction companies are an important part of the strategic process adopted by companies. Either contracted to write a strategy, deliver on one that has been unfulfilled or to evaluate where improvements can be made, these consultants are tasked with making a positive contribution to any business.

These organisations inject fresh thinking into a business looking for areas for improvement from management and leadership to sales and marketing through to performance improvement and cost reduction.

Whether writing or delivering these strategic plans, one of the areas we would urge these business experts to look at is foreign exchange.

If your client’s business is involved in any sort of international trade then the likelihood is that they will be involved in the exchange of foreign funds and this means dealing with currency risk every day, which can have a dramatic effect on all parts of the business.

This is an area when business management and change management consultants can immediately help their clients save and make more money.

We continuously strategise with businesses to help best manage this risk and produce a positive outcome rather than ending up each year with a foreign exchange loss on their profit and loss.

We charge nothing for us to come and analyse what improvements can be made and to identify where sometimes huge amounts of money can be saved.

Do please make contact if you think we can help.

Is foreign exchange forgotten when it comes to international trade?

Tue, 05 Feb 2019 15:40:52 GMT

Chambers of Commerce and other business bodies regularly offer courses and workshops entitled ‘Introduction to Foreign Trade’ or similar. While they are worthy, there always seems to be one important element missing.

A sound introduction to the role of import and export, combined with an overall picture of how the many elements of international trade fit together are all very useful, but what is the whole reason for trading overseas? I assume you want a better market footprint and an increasing in your profits.

Surely, as a result, one of the most important factors is the cost of goods for importers and the cost of your goods for exporters, otherwise the whole journey into the foreign market is fruitless unless you are buying and selling at the right price. You need to protect your margins and keep them consistent.

So, amid all the useful advice on the wider commercial implications of international trade and insights into the global trade environment, why isn’t more attention paid to foreign exchange and risk management?

Choosing the right provider to manage your funds for your overseas supplier payments or for the repatriation of your foreign funds into GBP does of course make all the difference to your bottom line.

Competitive exchange rates are vital to a successful business. The better the exchange rate, the more competitive your business will be. Yet import and export businesses often just turn to their banks. This will cost you a lot of time and money. We all know banks are impersonal, difficult to deal with, bad communicators and sometimes lack specific knowledge. They certainly are not experts in this field.

Independent services like ours can buy foreign currency at the same market rate as banks but charge a far less fair and transparent margin for you to maximise your profits. We offer you every possible advantage in the ever-fluctuating currency market and to make sure you are set up to complete secure transactions as efficiently and quickly as possible.

This is the vital element that is missing from many international trade courses but should be incorporated to give newcomers and experienced importers and exporters alike a clear insight into basic procedures and good practices. Currency margins are so important, so be bold and compare us to what your bank or incumbent supplier is charging to see if we can make a difference; it will cost you nothing.

If you are struggling to find an international trade course or workshop that covers foreign currency matters, then give us a call also as we will be able to assist. Our help and guidance costs nothing, but our services will be invaluable.

Meanwhile, it would be good to see more courses featuring ‘foreign currency’ on their agendas.

If you need our help for your first foray into international trade or if you are an experienced import and export business that wants to fine tune your currency management then, please do not hesitate to contact us.

The dark at the end of the tunnel

Wed, 23 Jan 2019 15:43:31 GMT

For nearly three years, the entire British economy and way of life have been dominated by Brexit and what it will mean for the UK not to belong to the EU following its departure on March 29th, 2019.

Parliament has been in a state of foment almost since the referendum result was announced.

This was never a Party-Political event and when she took over as Prime Minister Theresa May should have realised that and that departure from the EU was such a disruptive event that it could never find a consensus among MPs.

It is perhaps surprising that so many Government MPs were so radically opposed to the agreement that Mrs May struck with Brussels in December 2018 that they banded together to vote it down by the largest margin ever seen for a Government Bill in Parliament.

This was not a Bill that needed to be taken away and be given a few tweaks here and there, 118 MPs from the Government benches voted it down and expect never to see it again. Any plan B that is put before the House will need to be radically different to what has been seen so far and there lies the issue. Of those 118 MPs, not all were radical Brexiteers, what was presented last week appealed to no one so it is not a case of a little more hard Brexit here or a little more soft Brexit there, it is out with the old and in with the new.

The Opposition Leader will not join in talks to find a consensus unless the threat of no deal is taken off the table. It is his refusal to enter talks that is, in fact, bringing no deal closer and as Mrs May said this week in Parliament it is not within her power to guarantee that the UK won’t depart the EU without a deal.

The EU has also had something to say about Brexit since the draft agreement was disposed of so definitely.

Guy Verhofstadt the Leader of the Alliance of Liberals and Democrats in the European Parliament and a former Prime Minister of Belgium has already said that it is inconceivable that the Brexit decision (as opposed to any transition period) should be extended past the date of the European Elections which take place between May 23 and 26. That basically means that a delay or postponement of the UK’s departure on March 29th simply cannot happen.

Mrs May has several “red lines” that have been in place for some time and these do have most of the support in Parliament. These are 1) Departure from the customs union and single market 2) an end to free movement and 3) a continued open border between Ireland and Northern Ireland. The final detail was enshrined in the Good Friday Agreement which brought peace to the Island of Ireland after centuries of unrest.

Those three tenets should, therefore, have formed the basis of her negotiating position but she has allowed them to be watered down to such an extent that they barely exist.

The issue of the open border and the backstop agreement which confirms an invisible border will remain even if there is no free trade agreement between the two sides.

This is seen as, in effect, giving Brussels the right to keep the UK within the EU until it says it can leave and is the major stumbling block for Brexiteers who feel they have no reason to trust anything Brussels says but will not enshrine in law with either an end date of a unilateral departure agreement. Brussels for its part says that a backstop with either of these two clauses isn’t a backstop.

That impasse isn’t likely to ever be resolved without either a major climbdown from one side or the other or a remarkable negotiating coup from the UK side. Neither is likely, so a no deal Brexit despite Jeremy Corbyn’s best efforts remains a possibility.

Corbyn’s stance has nothing to do with Brexit and everything to do with his desire to lead his Party into another General Election. He is well aware that no deal cannot be guaranteed and has, again, made himself look slightly foolish.

But and it is a huge but, what about a second referendum in the UK? Plenty of people on the remain side are demanding it, but it is viewed as a non-starter by the Government and something just a little less probable than the second coming by Brexiteers. You see, the Brexit referendum was part of the democratic process not a best of three or five set tennis match.

Were there to be a second referendum, and a bill calling for such an event could come close to succeeding in Parliament, there would be significant social unrest irrespective of the result. It is no excuse for anyone to say they didn't vote thinking the result was a foregone conclusion or voted leave without fully understanding the consequences. Democracy doesn’t offer second chances to those who disagree with the majority and everyone is free to vote or not (in the UK) and it is beholden upon everyone who votes in an election or referendum to understand who or what they are voting for.

The final possibility is a General Election but given the support for the Prime Minister, perfectly put by one of her fiercest critics who said that if Mrs May decided to stand on her head at the dispatch box and “whistle Dixie” he would still support her Government over the Opposition, means that such a decision is in her hands. Having survived a vote of confidence from her own Party and her Government surviving a similar vote from the entire House of Commons she is not likely to risk relinquishing power now.

Following the Vote of Confidence in her Government Mrs May said she would be inviting the Leaders of all Parties to attend one on one cross Party talks and she would also canvas the views of senior Parliamentarians. The Leader of the Labour Party turned down the invitation as I have already said but given the speech made by Mrs May in Parliament on Monday, January 21st, little or no progress was made in any event.

So, as we approach the “no deal threshold”, it would be more than a little ironic if the only thing that a majority of Parliamentarians agree upon; that no deal is the most unsatisfactory outcome, that is exactly what is probably going to happen.

P&O one of the major British Shipping Companies which is centuries old has decided today (January 22nd) to “re-flag” its ships in Cyprus prior to Brexit. It is concerned that its tax arrangements remain within the EU. This an issue that has vexed many multinational businesses whose complicated tax affairs need to be futureproof. This is unlikely to be an isolated event.

The Dark at the End of the Tunnel is going to be a significant downturn in financial markets were a no deal result occur. So far as the outcome of Parliamentary discussion is unclear the financial markets have remained relatively calm.

Sterling which has been under pressure for almost the entire Brexit negotiation period, punctuated by a few brief spells of optimism has traded in a relatively narrow range. There are several reasons for this. The market remains short overall of Sterling and Sterling based assets so the downside is protected. The threat of no deal and the chaos that could bring have discouraged anyone from getting even a little bullish over the future. Hedge funds who often take huge bets on the outcome of such events had an extraordinarily poor year in 2018 and have therefore remained side-lined.

I cannot help feeling that the market is in the eye of the potential Brexit storm and as the witching hour of 11 pm on March 29th approaches it is going to herald volatility which if not unprecedented will not have been seen for many years.

Alan Hill 22-01-2019

Pound sterling in strong recovery after Brexit deal voted down

Wed, 16 Jan 2019 15:45:21 GMT

Brexit deal defeated by margin of 230.
Government faces confidence motion mid-week, should win.
May intends to reach out to other parties, head back to Europe.
Pound-to-Euro Exchange rate @ 1.1275.
Pound-to-Dollar exchange rate @ 1.2858.

The British Pound powered back towards multi-week highs after parliament voted down the EU-UK Brexit deal by a margin of 230, with the Labour party responding to the defeat by calling a no confidence vote in the government, which will be debated Wednesday. This is likely to be a win for the government with both the Conservatives backing their government as well as the DUP.

If the government wins the vote GBP should not move greatly but with a defeat expect a big decline in the value of sterling.

On the decision of parliament Prime Minister Theresa May will look to engage all parties in the House of Commons and to hopefully agree on a deal that could be passed. May will then head back to Europe to see what additions the EU will be willing to offer.

The Pound's decline ahead of the Brexit deal vote came as no surprise but the upturn after the vote came as a surprise as well. Sterling's reaction is fascinating as the result was expected but in these volatile times you can never tell. Consequently GBP/USD rose sharply above 1.28 having dipped earlier in the day. This result can only be a possible improvement on any deal that is struck and now Sterling is likely to rise to the top of recent rises.

In short, the declines and gains are not based on any new information, if anything the real news out today concerning Germany being open to "further talks" in the wake of the deal being voted down is a real positive.

In response to the vote, the President of the European Commission Jean-Claude Juncker ran with this theme saying he urges "the United Kingdom to clarify its intentions as soon as possible". This suggests to us the door is open.

German Foreign Minister Heiko Maas announced that, “if it goes wrong tonight, there could be further talks.”

The next hurdle then will be the no confidence vote and then we also will see unknown volatility in the GBP market much more than the predicted loss last night.

Whatever the outcome for both corporate and private it is always best to evaluate potential movements against your budget rate to protect your volatile margins.

If anyone has any questions please do contact us on 01548 857009 info@southwestfx.co.uk