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Foreign Currency Exchange Risk Management for Businesses

 

Remove future foreign exchange risk today.

Greater peace of mind tomorrow.

Let American Express® support you when it comes to dealing with business abroad. Let’s talk about what to think of when you’re considering foreign exchange risk and how American Express has your back, allowing you to concentrate on growing your business.


Understanding  your exposure towards foreign exchange risk

  • How much of your business relates to imports and exports?
  • Which currencies do you send and receive?
  • Are your payments time sensitive or can you take advantage by paying earlier?
  • What impact would a volatile exchange rate have on your profits?
  • What types of foreign exchange risks are there?
Understanding what type of exsposures to think about

These questions should be thought about when deciding on how you are going to interact with the foreign exchange market. There are three types of ways to deal with foreign exchange as mentioned below.

Three ways to manage foreign exchange risk with us

Spot Contracts and what they are

Spot Contracts

 

This is where you will deal with any payments on a day to day basis going with the current rate which could be in your favour or not.

 

Fixed Contracts and what they are

Fixed Contracts

 

This enables you to use an agreed amount of foreign currency at the agreed fixed exchange rate to make multiple payments on an exact date within the next 12 months.

Window Contacts and what they are

Window Contracts

 

These also have a definitive expiry date in the next 12 months but enable you to make multiple payments to different beneficiaries at a fixed exchange rate throughout the duration of the contract.

Forward contract benefits

competitive foreign exchange rates

Help protect your organisation’s margins by securing fixed exchange rates based on current market conditions for future foreign currency payments.

Manage your company cashflow with accessline

Choose from Fixed or Window Forward Contracts for the specific amount of currency you require.

competitive foreign exchange rates

Avoid getting caught out by foreign currency exchange rate fluctuations.

Manage your company cashflow with accessline

Book and use forward contracts online as easily as booking standard payments.

competitive foreign exchange rates

Facilitate more accurate budgeting and forecasting. Lock in and use foreign currency at a fixed exchange rate for up to 12 months ahead.

Manage your company cashflow with accessline

Blend forward contracts with spot payments to take advantage of the best rates.

Safeguard margins with forward contracts

 

 

Organisations that trade internationally are exposed to currency market fluctuations, so it can be difficult to forecast costs accurately.

 

For example, in 2013, USD ranged from 1.4812 to 1.6577 against GBP. If ABC Ltd. orders 100,000 USD of goods with the rate at 1.6577, the cost is GBP 60,325. If they then pay the invoice when the rate has dropped to 1.4812, their costs have increased more than 10% to GBP 67,513.*

 

Given this forex volatility, locking in exchange rates using Forward Contracts can help to deliver the peace of mind organisations need to plan and budget.

FAQS

 

Ready to get started?

 

We look forward to hearing from you.

Speak to a Specialist: 0800 085 3456, or fill out an interest form:

 Learn more about how American Express can help with help with international payment solutions.


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