EXPERT VIEW
HELEN PHILLIPS, SENIOR INTERNATIONAL
COMMERCIAL BANKING MANAGER, HSBC
1. Do nothing and accept the FX rate at the time
of payment or receiving funds. This has the
advantage of gains if exchange rates move
favourably, but the company has to also take
the pains of unfavourable rates.
Doing business is challenging enough
in today’s economy; the last thing
a company needs to deal with is a
significant currency loss.
Trading in sterling can eliminate foreign exchange
(FX) risk; however this passes the risk onto the
supplier or customer. An importer’s overseas
supplier may charge a higher price to cover the
additional risks of receiving sterling.
For an exporter that insists on payment in sterling,
the risk is sterling increases in value making their
goods more expensive and less competitive.
Businesses that choose to deal in foreign
currencies expose themselves to FX rates which
can be extremely volatile, highly unpredictable
and uncontrollable. However, their effects can be
managed by adopting an FX strategy.
When it comes to an FX strategy, there are three main
alternatives to consider:
2. A forward contract allows a business to fix
the FX rate in advance. This provides certainty
and protection should rates move in the
wrong direction. However, as the exchange
rate is ‘fixed’ the business has to forego
potential gains if rates move favourably.
3. A more flexible alternative is a currency
option. Here the business specifies the
worst protected rate it would accept and
the currency exchange is protected at that
level. If the exchange rate moves against the
business, it can still deal at the protected
rate, but if rates move in its favour, it can
deal at the more advantageous spot rate.
An upfront premium is usually payable for
this option although a range of nil-premium
products are available.
To do nothing with FX rate risk could be dangerous. At
HSBC we offer an FX strategy that combines the three
main alternatives and gives businesses time to change
their operations accordingly.
For further details on how HSBC can help you develop
an FX strategy, please contact Lauren Hughes at:
[email protected]
HEALTHCARE SOCIAL MEDIA WORKSHOP SUCCESS
Medilink Yorkshire & Humber recently held a successful
social media and digital communications training day for the
Collaboration in Leadership for Applied Health Research and
Care (CLAHRC) for Leeds, York and Bradford.
The training provided an insight into everyday use of social
media platforms in the healthcare sector and utilisation of
advanced techniques to increase engagement.
Presented by Medilink’s PR team, the event gave delegates
a deeper understanding of how to use social media more
strategically and the important role of digital communications,
including use of new technology such as tablet computers.
Medilink will be holding a number of training days for the
CLAHRC, as it looks to build stronger online networks and
enable associated clinicians and researchers to communicate
their work more effectively through social media.
Dr Ai Lyn Tan, NIHR Clinician Scientist said: “It was a very
useful and practical session, well run and the speakers did a
good job, it was definitely well worth attending.“
Jason Brannan, Director of PR and Communications at
Medilink Y&H, said: “Digital and social