The European Central Bank’s strategy of aiming for a weak Euro could prove fruitful for European businesses that export outside of the Eurozone, says Carl Hasty, director of international payment specialists Smart Currency Business.
This would mean that UK exporters to countries outside of Europe would benefit the most from Euro’s current weakness.
“Companies in the Eurozone that make their income in US dollars or British sterling would benefit from a weaker euro,” Hasty explains.
“The opposite case would apply for UK exporters trading with Eurozone countries, particularly if they are pricing in euros. UK exporters need to have robust currency strategies in place in order to minimise the losses that can stem from currency exchange.”
UK importers, meanwhile, could also benefit from a weaker euro, as their purchases are relatively cheaper.
But it is still crucial for importers to have the appropriate currency strategies in place to ensure that they minimise the risks that a potentially strengthening euro or weakening sterling would have on their bottom line.
Do you have a strategy in place?
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