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We tailor our service to meet the specific requirements of your business
If your are importing or exporting goods/services you will almost certainly have currency exposure. MSP prides itself on working with corporate clients to help maximize FX opportunity whilst minimizsing risk.
We are acutely aware that executing currency deals are not your main core business and therefore sometimes not deemed a main priority, but to deal more effectively will make a huge difference to your bottom line.
Take, for example, an importer needing €250k per month to satisfy their order book. By executing that requirement at a rate of say 0.8800 (1.1364) rather than 0.8400 (1.1765) MSP would produce a saving of GBP 2500 pm, or GBP 30,000 p.a.
Worth having don’t you think? And because of our large volumes of business we will always achieve a better rate than you going directly to the market.
We determine our point of execution by utilizing years of front-line experience and considering your time frames for when you need to make settlement with your suppliers and clients.
By taking the time to understand your business we will learn how you prefer to operate. We might suggest buying Forward (see below) to lock in current rates for periods up to 2 years. Or look to execute your requirement in tranches to seize prevailing opportunity whilst allowing you to take advantage should the market move further in your favour. MSP provides simple risk-management solutions.
Managing Foreign Exchange Risk
When the rate of exchange impacts the profitability of your business, you need the assistance of an FX specialist who is proven and trusted at managing foreign exchange risk.
MSP offers a free FX risk assessment check to help you identify those areas where you are at risk from exchange rate movement. We provide a variety of tools and services that will assist your organization to minimize these foreign exchange risks.
Your company needs a specialist partner with the skills to understand your exposures, processes and cash management requirements. MSP can assist you to understand which currencies and economic elements you are exposed to, their risk profile and market sensitivity.
Having completed a risk assessment we work with you to combine a range of products and services best suited to mitigating and managing foreign exchange risks, protecting your profits and operating margins in uncertain economic climates and developing a long-term foreign exchange hedging strategy. Working with MSP can improve your cash management process thereby increasing your working capital.
Our main objective is to remove the hassle from the complex world of international payments, allowing you to focus on your core business and realize opportunities for growth.
Market Orders from MSP Currency Services
If you would like to target a rate that’s not currently available in the market, then market orders could help you achieve this. There are two main types of market orders that your business can utilize. These, coupled with the expertise, market knowledge and dedication of the MSP team ensures that your foreign exchange needs are managed proactively 24-hours a day.
A limit order
This allows you to set a target exchange rate more preferable than the current market level. Should the market reach your desired rate, your currency purchase will be automatically completed at the favoured rate you have set.
Limit orders are useful if you have upcoming payments but are not restricted by tight deadlines and therefore have time to try and achieve a better exchange rate.
A stop loss order
This allows you to set a 'worst case' exchange rate below the current market level. Should the market move against you a stop loss order will automatically lock you in at your chosen rate and protect you from further losses.
Forward Contracts from MSPFX
Imagine you are a company with a need to purchase components worth 200,000 euros from a European supplier in 5 months’ time. Based on a GBP/EUR exchange rate of say 1.1300 you have determined that supplies will today cost you GBP 176,991 meeting your budget and cash flow constraints. On this basis you commit to purchase the components, and you agree to sell them to clients at a fixed price, generating maybe GBP 10,000 of future profit to your business.
However, GBP might weaken against EUR during that five month period to a rate of 1.0800 meaning that your cost would increase to GBP 185,186. This would negatively impact your budget, cash flow and reduce your profit by GBP 8,194 and eliminating a large portion of the profit margin.
In this case, if you booked a forward contract with MSP at the time you purchased the components you would have been able to secure at a preferential and locked-in rate and avoid any unexpected impact on your profit margin. Of course, you would lose out if GBP strengthened against the EURO, but exposing your business to currency risks may have a long term effect , whereas if you buy forward you can guarantee an exchange rate based on where you cost the order.
MSP forward contracts also provide flexibility allowing you to take delivery of your purchased currency in part or in full at any time between the date of purchase and maturity date.
Security of funds
Security of funds is assured as we only deal through HMRC and FSA/FCA regulated FX rate providers and your monies are paid to them and by them.
The past few years have seen a massive rise in volatility as concerns grow over global economic and political instability. We’ve seen massive swings in sentiment and therefore in price trends. One minute in your favour and the next most certainly not.
Blink and you miss it, and with daily global FX market turnover now exceeding $6 trillion each day, can you afford not to be taking better advice right now?
To discuss your requirements contact MSP today and speak to your own designated currency specialist who will get to know your business inside out.