For example, a UK firm importing from China could face reduced margins if the pound falls vs the dollar or Chinese yuan.
For example, a UK firm exporting to Ireland may be less competitive if the pound gains vs the euro as they will be comparatively expensive.
For example, a UK firm with a French subsidiary which consolidates to GBP could report lower earnings if the pound gains vs the euro.
1. Shift the risk to the other party by only transacting in your own currency
2. Match and offset the exposure e.g. foreign currency sales to offset costs
3. Net group exposures e.g. income from a subsidiary nets with the parent's costs
Oku Markets offers the full range of FX instruments. Here's a quick introduction to the most common trade types.
The rate is agreed at the point of execution and delivery of funds is made straight away, with most currencies available to settle on the same day
Spot contracts are used to make payments or to exchange currencies at the prevailing spot exchange rate
The rate is agreed at the point of execution but delivery of funds is scheduled for a future date or within a date range
Forward contracts allow businesses to secure exchange rates as a means of protecting from adverse currency movements
FX Swaps are used to manage cash imbalances between dates
For example, if there is a time gap between a foreign currency payment and a receipt, a Swap can be used to fund the payment ahead of the receipt
We'll crunch the numbers and do the heavy lifting so you can run your business with an effective currency programme to minimise risk and maximise opportunities
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