What a difference a year makes! 2017 has been a volatile year for the FX markets and for Sterling a game of two halves – one vs. Euro the other vs. the USD. As can be seen below, vs. USD Sterling has gradually strengthened, but vs. Euro it weakened. This is despite Interest rate rises both here and in the US. Someone somewhere thinks the Euro has got legs, and all that talk of debt, bust nations and kicking the can down the road……. all “Fake News”, nothing to see here, move along. Next year will be just as volatile as EU tries to agree with the UK a trade agreement that works for all concerned. This past year the GBPUSD rate has ranged between 1.3657 and 1.1982 and GBP/EUR between 1.2001 and 1.0741 and so picking when to deal and when to fix forwards has been an unenviable task.
What is certain is that those who grabbed currency when they were above the rate they were using in the company books, secured a profit and perhaps even made a little extra. Leaving it to chance when the invoice was due could, as the peaks and troughs below show, have resulted in that profit margin being eroded. Next year it will be even more important to price realistically, and secure the rates when you can. Speculative bets on the euro rose to a record last week vs. the dollar even though the Fed plans to raise Interest rates three times in 2018….go figure! Whatever your poison, if you want to know how to fix rates going forward please do get in touch.