How Do I Get Better GBP/USD Rates?
GBP/USD was recently shattered to it's cheapest since March 2020, below 1.1500, as SME profit margins continue to take a hit, and UK consumers see prices rise higher. Recession fears and aggressive Fed rate hikes have not been helpful for UK businesses paying overseas suppliers in USD.
As hopes for a continued Sterling recovery grow, we look at some attractive options for UK businesses with upcoming invoices in USD:
Auditing Your Currency Provider
The biggest contributing factor to achieving a strong rate outside of market conditions is Price. What is your FX broker charging you? Even with poor market levels, KPIs and commission incentives remain the same. Staying as close to the interbank (real) exchange rate is key to minimising losses caused by diminishing currency markets.
Solution
Take advantage of our free online cost calculator. Find out how much you are paying for your conversions, and look for cost-effective ways to reduce costs. Knowing where you stand just as important than knowing where the markets are.
Automated Rate Alerts
Are you currently watching currency markets on a daily basis, or fortunate enough to be receiving regular (auotmated) rate alerts?
Solution
The US Dollar remains under pressure on Fed easing hopes, and if Sterling appreciation continues, capturing the stronger rates in short periods of volatility will prove extremely helpful to GBPUSD traders looking to protect their bottom lines. Automated rate alerts are an excellent way to track live exchange rates, making them a useful tool in securing stronger rates for upcoming invoices. One option would be to secure better rates with real-time alerts, which you can do with Integritas.
Short Term Forwards
It’s clear right now that Forward Contracts might not be the best long-term solution, especially after last weeks fresh multi-month highs at 1.1840.
Solution
If you are worried about falling exchange rates as you watch the markets move, fixing the exchange rate for upcoming invoices using short term fixed forwards is another attractive solution. As soon as the strong rates are available, one might look to reserve them for the invoice due date and put their mind to rest.
Summary
It's not unlikely that many UK SMEs will hear various different opinions of where rates are heading, and the implications it may have for their bottom line profits. The most important thing to consider when sending and receiving international payments from the UK is to use a provider you can trust, and one that helps you react when markets move in your favour, rather than using the markets as a means to sell hedging facilities in times where it may not actually be in your best interest.
Your money belongs to you, let's keep it that way.
✓ Fixed 0.15% Currency Markups ✓ No Payment Fees ✓ See the interbank (real) exchange rate ✓ Capture the best rates with instant rate alerts ✓ Access Forward Rates ✓ Single Multi-Currency Accounts ✓ Named Account Details (i.e. unique IBAN numbers) ✓ Simple Accounting Features ✓ Send and Receive Payments in minutes