Is your business exposed to currency risk? Foreign exchange volatility could be costing you

If you’ve reviewed your year-end accounts and spotted an unexpected FX loss or gain, you’re not alone. With global volatility, shifting tariffs and unpredictable interest rates, it’s becoming increasingly important for UK businesses trading internationally to have a clear, well-informed foreign exchange (FX) strategy in place.

But here’s the good news: you don’t have to tackle this alone.

Could your business benefit from FX support?

If you:

• Import or export goods and services
• Receive or make payments in foreign currencies
• Have suppliers or customers overseas
• Need to manage currency costs as part of budgeting and forecasting

…then yes, you likely have currency exposure.

Why it matters: The cost of ignoring FX risk

In Q1 alone, major currencies like GBP/USD and EUR/USD swung enough to impact a £1 million transaction by over £100,000. That’s not a rounding error – it’s a potential blow to your profit margin.

The difference between the minimum and maximum exchange rate for GBP/USD last quarter was $120,000 on a £1m transfer. That’s the impact of getting your timing (or strategy) wrong.

What’s going on in the markets

After a hopeful start to the year, the economic mood has darkened somewhat. Tariffs introduced by the US on 2 April – now dubbed “Liberation Day” by Republicans – have shaken global markets. These tariffs are essentially taxes on imports and they’re already pushing up prices across supply chains. Inflation is likely to rise, which puts pressure on consumers and businesses alike.

For UK businesses, this matters. It could mean higher costs for imported goods and materials, more uncertainty when trading internationally and tougher conditions for planning and investment. The global reaction has been uneasy, with confidence taking a hit across markets and even the prospect of a global economic slowdown now being openly discussed.

How are central banks reacting?

In the UK, the Bank of England has paused rate cuts, keeping interest rates at 4.5% as of March. Inflation is proving sticky – especially in services – and governor Andrew Bailey has warned that global trade tensions could worsen the situation. Across the Atlantic, the US Federal Reserve is also holding off on cuts, even as the risk of stagflation (low growth + high inflation) increases.

The European Central Bank (ECB), on the other hand, has taken a more aggressive stance – cutting rates for the sixth time in under a year to support growth. But with Europe exposed to US tariffs too, even this proactive approach might be tested.

What’s the outlook for the UK economy?

The UK is in a delicate position. Growth forecasts have been revised sharply down – just 1% for 2025 – and a cocktail of rising taxes, energy costs and employer national insurance contributions is squeezing both households and businesses. Chancellor Rachel Reeves has announced a £14bn patch-up for the public finances but there’s little room for bold moves.

For businesses, this all adds up to tighter margins, cautious consumers and a need for sharper financial planning.

So, what should your business be doing right now?

• Get on top of your costs – With input prices likely to rise further due to tariffs and inflation, now is the time to revisit your cost base. Look at your contracts, renegotiate where possible and consider alternative suppliers – especially if you’re importing from the US or heavily exposed to global supply chains.
• Secure your cashflow – Uncertainty tends to delay payments and stall orders. If you rely on invoices being paid promptly, it’s worth exploring funding options such as invoice finance to release working capital and smooth out any bumps ahead.
• Fix rates where you can – With interest rate cuts off the table for now, fixed-rate finance might provide a valuable buffer. Review any borrowing arrangements and consider locking in now if your business is likely to need funding later in the year.
• Don’t delay decisions – With markets changing fast, it’s wise to act early. Whether you’re planning to invest, refinance or restructure, doing it sooner rather than later can help you avoid being caught out by further economic shifts.

 The bottom line?

While the global picture is uncertain, businesses that plan ahead and keep a tight handle on their finances will be best placed to weather the storm. If you’re unsure what’s right for your business, a conversation with a finance partner could help you map out your next steps.

Our FX solution

We’ve partnered with one of the UK’s leading FX providers to help our clients protect profits, plan ahead and transact globally with confidence.

Together we can provide you with:

• Expert guidance on your currency exposure and bespoke hedging strategies
• Access to competitive rates that beat traditional banks
• Support with managing risk, forecasting cash flow and protecting margins
• A seamless, supported FX process that saves time and reduces admin

Whether you’re making one-off transfers or planning long-term international expansion, this could be a game-changer for your business.

 Click here to book a call with Stef Radymski or email him on stef@evolvebusinessfinance.com to discuss your current position, FX exposure and options.

We’d love to help you:

• Understand the risks you may not realise you’re exposed to
• Identify ways to smooth cashflow and protect budgets
• Develop a smarter FX plan for the next quarter (and beyond)

Let’s make your global business smoother, safer and more profitable!