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Small Firms Potentially Losing up to £110m Due to Unstable Currencies

Small Firms Potentially Losing up to £110m Due to Unstable Currencies

The UK’s small and medium-sized companies are potentially losing out on up to £110m every year while making overseas transactions due to unstable currency markets, a report by moneycorp has revealed. According to the research, small overseas traders could be unknowingly falling victim to currency market fluctuations and, while the number of UK small businesses exporting has increased (the latest figure totalling 223,000), this could be detrimental to a small firm’s exporting success. The findings come just one day after a report by the Confederation of British Industry (CBI) announced that small business export rates have hit their lowest rate since the recession. Andy Reid, a managing director at moneycorp, commented: “British businesses have a huge amount to offer to the internatio... »

SMEs Trading Abroad Warned to Guard Against Sterling Fluctuations

Small firms trading overseas should sign forward contracts with clients to protect themselves against the risk of the pound falling further in value, according to foreign exchange firm Moneycorp, writes Farah Jifri. Research from Moneycorp revealed that despite the value of the pound falling 14 per cent against the Euro over the eight months to the end of April this year, two-thirds of small firms that trade internationally did not use forward contracts in 2007. Forward contracts provide businesses with stability by allowing them to fix an exchange rate on the day that they become aware of their requirement for future settlement. This forward planning can prevent firms incurring losses due to exchange rate movement. “It is possible to save large sums of money through this sort of cur... »