UK economy in a period of uncertainty as talk of EU withdrawal lingers

Dithering over the UK's future in the EU is the last thing the British economy needs right now and for the sake of SMEs, the Prime Minister needs to bring some certainty to the table.

The impact on the British economy and Sterling of a UK withdrawal from full EU membership is potentially enormous. Even speculation around such a move is making waves both here and abroad, as recent warnings out of Europe and the US have demonstrated. Matters of immigration, employment, taxation, trade and investment, tariffs as well as exports and imports are just some of those overseen by the EU, which would likely need to be redefined if the UK were to go it alone.

While this may create a favourable opportunity for British businesses, as the opportunity could be seized to cut red tape and enhance growth policies, or cause woes for Britain by isolating it from its major trading partners in Europe, the main concern at present is the lack of certainty over the government's stance on the issue. Such uncertainty is causing volatility in the currency markets and hindering the ability of UK businesses large and small to plan for their future.

It is crucial this debate reaches the light of day and is explored in full, instead of being left simmering in the background. The global economy is uncertain enough in 2013 for British firms and employees, without blurring the lines even further by avoiding the issue.


For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Transfer money to China in Renminbi (CNY or RMB) – What you need to know

 You can transfer money to China with Smart Currency. Smart offer you the facility to make money transfers into Chinese Renminbi (CNY) bank accounts in mainland China and Hong Kong.

China is a very highly regulated destination for money transfers, and sending money there can sometimes be difficult. Before you make any money transfer to China, read our guidelines below so that you are aware of the requirements for payments being sent to the China and Hong Kong in CNY in order to avoid payments being delayed or returned.

If you are unsure or require any further information or assistance, we would be more than happy to help.

Existing clients can go directly to their trader, or if you are interested in speaking to us at Smart, send us an email at info@smartcurrencybusiness.com, call us on 020 7898 0500 or visit the Smart Contact page.  

Businesses transferring money to China

If you are a Business wishing to make a payment to another company in China or Hong Kong in CNY:

The receiving business in China must be a 'Pilot Enterprise’ (i.e. approved by the PRC regulatory authorities) – Check with your beneficiary that they are a Pilot Enterprise BEFORE making any payment instructions.

If you are a Business wishing to pay salary/expenses/dividends of employees or shareholders based in China in CNY:

Your money transfer must be paid to a UK Corporate account with a bank in China. Please make sure the account details provided to us are valid for this purpose BEFORE booking a trade with us.

If you are an EU importer wishes to pay a supplier in China in another currency e.g. USD:

These transactions fall outside the RMB (CNY) trade settlement scheme's scope but are permitted. Contact Smart Currency Business for help regarding any foreign currency exchange requirements.

If you are an EU exporter invoicing  their buyer in China in another currency e.g. USD. Where the buyer pays in USD

These transactions fall outside the RMB (CNY) trade settlement scheme's scope but are permitted.

Individuals sending money to China

There are even further restrictions when individuals are in need of transferring money to China in CNY. With Smart Currency, your payment requirements will be taken on a case-by-case basis and we would be more than happy to assist you with information regarding sending CNY to China. Please get in touch with us to see how we can help reduce the costs of your money transfers.

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit the Smart Currency Business website

Currency Update - Euro close to 1.20 against sterling

Sterling suffered its biggest weekly loss against the euro in almost a year last week as the fragile state of the UK's economy started to be reflected in the markets.

We are approaching a key support level of 1.20 interbank as sterling continued its bad week on Friday dropping for a sixth consecutive day against the euro falling to 1.2060 - the lowest since April 2012, following the release of terrible manufacturing production data which showed it shrinking by 0.3% when growth of 0.5% had been anticipated.

Very difficult to say what will happen if we reach the 1.20 support level but if breached, we could see a rapid loss in the value of sterling against the euro or we could see sterling bounce and start to regain lost ground.

If you are making regular transfers then it may make sense to secure part if not all of those transfers for the next three to twelve months.

If you are making larger transfers either way (sterling into euros or euros into sterling) then it may be sensible to do the same thing by either securing all or part of the amount to be transferred. Remember we can secure rates into the future using a forward contract.

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Financial market movements - what events will make an impact?

Smart Currency Business Director Carl Hasty speaks to the press about the impact of elections, changes in national government and international events which could effect financial and currency markets.

“With the silly season behind us for another year, everyone is turning their attention to the year ahead and pondering the likely impacts on business operating conditions.

One often overlooked aspect for international traders is elections and leadership changes, which have the potential not just to affect domestic policy within that country but a variety of conditions including the currency, taxation, import duties and so forth. Currencies are particularly vulnerable to the uncertainties created in the days and weeks leading up to an election as speculation mounts on who will govern the country.

Israel is getting restless in the lead up to an election in 2013 and the Australian minority government is trailing in the polls with an election due by November. However, the uncertainty created by elections will be felt nowhere more sharply this year than in Europe, where most governments’ popularity is suffering at the hands of austerity measures.  Italy goes to the polls at the end of February, following Prime Minister Monti’s decision to step down.

More significant though will be Germany’s general election, when the rest of the world will be anxious to see whether Angela Merkel retains power and with it her grip on the Eurozone debt crisis negotiations. At present, it seems uncertainty itself is the only sure bet, meaning the world’s key currencies – particularly the Euro – may be in for a bumpy year ahead.”

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Government looking to boost SME innovation with further funding

Comments from the Corporate Desk at Smart Currency Business:

“The Government's announcement last week of a second round of Innovation Vouchers is a welcome boost for UK SMEs in securing their longer term future – however it does little to help them through the austerity-plagued quagmire of the current economic setting. Universities and Science Minister David Willetts said expansion of the vouchers programme with the injection of a further £1.1million would encourage small businesses to develop new ideas. While it does show the Government is looking at ways to boost innovation, the application process and quarterly distribution of funds – rather than as and when an application for funding is approved – demonstrate a continuation of the red tape SMEs must face in the gamble to secure limited government support for their growth.

In the immediate term, SMEs would do better in 2013 by analysing their current operations to identify ways to cut costs and streamline existing processes in ways that do not adversely affect output. Whether it be finding more competitive partners and suppliers, negotiating better payment terms, insuring against unforeseen troubles or accessing specialist advice to tackle complex operating issues, auditing your firm's finances could be just the ticket to strengthening the business' position for a happy and prosperous new year.”

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

The Smart way to make company relocations more cost effective

Unfortunately for many businesses and their employees, the issue of currency exchange becomes an after-thought when relocating abroad – despite the potential for this aspect to be the most costly of all.

There are plenty of things to consider when undertaking an international relocation. There is selecting a removals company, organising accommodation in the new country, arranging visas for staff moving outside of the EU, ensuring adequate transit insurance is in place, booking flights, sorting what equipment will be relocated...the list goes on. Yet managing currency transfers is all-too-often forgotten.

International relocations will affect an employee individually, the company's HR division as well as the business at large, so the costs of overlooking any means of achieving substantial cost savings can have wide-felt reverberations.

HR departments must ensure that any relocation produces cost benefits and/or improved efficiencies in order for the move to be feasible. There is also a duty of care for employees, while maintaining a satisfactory level of productivity.

This requires a careful balancing act, making the move attractive for employees so as not to lose skilled workers, while meeting budgetary constraints.

When making payments associated with an international relocation, HR managers should look not just at the costs of the required services but also the exchange rates they are receiving to ensure optimal value is being achieved. Foreign-denominated costs can include immediate employee expenses, employee accommodation, visa applications, taxation registrations, local insurance coverage and so forth.

For a business as a whole relocating offshore, the cost burdens will be even more acutely felt. Indeed, changes in exchange rates can mean the difference between profit and loss on future transactions, and even negate the need to move at all.

Exposure to currency rate fluctuations does not just affect the cost of the immediate relocation.  On an ongoing basis, exchange rate movements directly affect the cost of imported materials, the competitiveness of exports and the profit margins on sales. Exchange rates also have more wide-reaching affects, such as on the price of energy and cost of living – affecting business operating costs and staff wage pressures.

Indirectly impacting on businesses are the impacts on the employee. Even if the business directly covers the costs of their relocation, there will still be personal costs incurred, such as transferring money from the sale of UK assets, accessing their salary and personal travel back to the UK.

Prohibitive costs in these areas have the potential to reduce the attractiveness of a relocation to employees, result in demands for higher relocation allowances or lead to employee stress which, in turn, affects staff productivity and morale.

Given these wide-reaching effects of adverse foreign exchange transactions, it is crucial for business operators to consider whether currency risk mitigation strategies are factored into their  overall risk assessment and management strategy.

There are a number of ways businesses can reduce currency-related costs during a relocation. For example, forward contracts enable a favourable rate to be locked in for up to 12 months in advance, and are a valuable means of delivering cost certainty and budget integrity. Orders to buy allow non time sensitive transactions to be completed once market rates reach a a pre-determined point. And a limit order allows a business to set a floor under the price at which it is willing to make a trade, so as to restrict wild fluctuations and protect against losses from adverse rate movements.

Once a risk mitigation strategy has been formulated, the next step is to determine a way of implementing it that does not add to the already numerous expenses incurred as part of the relocation.

Far from being effective management tools, high street banks are actually the least efficient avenue in which to pursue currency transfers. Notorious for poor customer service and lengthy queues – both in person and over the phone – banks also charge hefty transfer fees on most transfers for SMEs.

These fees can equate to £30 or more per transfer. For businesses making dozens of transfers each week or month, these fees can quickly add up to thousands and even tens of thousands of pounds. Banks also effectively double dip on currency transfers by providing less-than-competitive rates of exchange.

In any aspect of an international relocation, Smart Currency can offer significant cost savings and added value – at no direct cost to the user.

As a reputable international payment specialist, Smart Currency Business assists UK SMEs by offering tailored risk mitigation planning, access to all of the major currencies and the full suite of currency transfer services. Smart does not charge transfer fees on transactions over £3,000 and offers better-than-bank exchange rates which deliver savings of as much as 4 per cent of the value of the transfer.

For the individual, Smart Currency Exchange assists clients on large and regular transfers, which are both handled efficiently and very cost-effectively. This personal service is a great help during what can be a difficult and stressful time.

For more information on how Smart Currency Business can reduce the costs of an international relocation for your firm and your employees, call us today on 0207 898 0500.

Case study: Claydon Drills

When your livelihood depends entirely on the whims of Mother Nature, it is absolutely vital to address the areas of your business that you can establish complete control over. This is the issue faced by Suffolk based company, Claydon Drills, who design and manufacture agricultural seed drills for farmers.

Denise Claydon tells us: “Our industry is 100 per cent weather dependent so if there is a bad year, of course this impacts on sales of our drills. 2012 has been a year of uncertainty. Some places haven’t even harvested yet and unfortunately this takes its toll”.

Claydon Drills came to life after Denise’s husband designed and built his own seed drill. After a neighbour caught glimpse of the innovative design and enquired as to whether he could purchase one of his own, word spread and soon their drills were being sold throughout the UK and across the water in Europe. With a need to pay suppliers in Germany and Italy, the company turned to their high street bank to complete the transfers.

Denise explained: “We used to have to travel to the bank, queue, wait in the bank for half an hour while they manually checked everything and then leave not knowing when they payment would clear. Inevitably it would take about a week and as business grew and we needed to pay suppliers more efficiently this level of service was no longer acceptable. This is when we began our search for a currency expert, found Smart and since that day, we haven’t looked back”.

“Initially Smart enticed us with good exchange rates but it was the incredibly simple process, excellent customer service and invaluable advice offered by Alex Bennett on how we should budget for international currency transfers which made us continue to use them. If I were ever to encounter someone who could benefit from their service like we have, I wouldn’t hesitate to recommend them!”

The message is clear. Managing your foreign currency exposure effectively is a vital requirement of any business that deals internationally. The team at Smart Currency Exchange have a unique understanding of the challenges faced when doing business internationally.

To find out more and download a free currency report go to www.SmartCurrencyBusiness.com or call Freephone 0845 638 0571 (or +44 (0)207 898 0500).

Making the push into new markets abroad

This week's view from Smart Currency

The big news item in the business world last week was the latest economic figures from the Office for National Statistics (ONS), which showed the UK clawed its way out of recession in the third quarter of 2012. However business and political leaders were quick to point out this result was helped, at least in part, by one-off events such as the Olympics, and that overall economic activity remains subdued.

Regardless of the official statistics, anecdotal evidence suggests that many British businesses are continuing to seek opportunities abroad in order to pursue growth or, in extreme cases, to survive. Indeed BPF President Philip Watkins has encouraged plastics companies in the UK to look hard at export opportunities, particularly outside of beleaguered Europe.

Many smaller companies in particular are often wary of venturing into new markets, fearful of exposure to exchange rate fluctuations. Indeed 65% of the businesses recently surveyed by Smart Currency Business agreed that such exposure acts as a deterrent to entering new foreign markets. However in doing so, these companies are missing potentially vital streams of revenue and profit growth, as well as the chance to diversify their base of both customers and suppliers.

When trading internationally, businesses must confront a range of factors, including foreign exchange. The difference between success and failure when facing these issues depends on the kind – and amount – of advice received from experienced specialists in the field. Devising tailored risk management strategies for entering new foreign markets is one of the services Smart Currency offers, which help businesses to make the most of new opportunities overseas during these subdued economic times at home.

 For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Case Study: Walwyn Fine Antique Clocks

The business of buying and selling antiques is not the same as your everyday retail operation. With such prized pieces of history on sale, buyers and sellers don’t tend to make hasty decisions. Although the need for international payments can be erratic, when it does arise, it is important that payments are made swiftly and that an agreeable exchange rate is achieved every time.

After running Kensington’s Rafferty and Walwyn Ltd for quite some years, Howard Walwyn decided to branch out on his own and his new company, Howard Walwyn- Fine Antique Clocks now handles exquisite timepieces from a range of makers spanning the globe. Dealing with suppliers and highly experienced craftsmen in a number of countries created a need to enlist the services of a reputable company to deal with all of their international currency transactions. On a friend from the antiques industry’s recommendation, Howard Walwyn was led to Smart Currency Business…

“After receiving the recommendation, I took the time to investigate Smart and a number of their competitors. The service that Smart provided was by far and away the best of the bunch, the rates offered put those offered by the banks to shame and no expensive fees were charged. Above all, Smart were reliable and trustworthy - just what we were looking for”.

Howard embellished on the levels of service received from his personal trader, Siobhain Barry: “I was instantly put at ease by Siobhain, so much so that I decided to use Smart Currency Business for not only my business account but my personal transfers too”.

He continued: “No matter how close together or far apart my payments are, the team are always on hand as soon as the need to make an international transfer arises. I am kept in the loop at all times so I always know where my money is and I enjoy feeling confident that I am getting the best rates possible at time of trade”.

In addition, Howard was quick to express his joy after hearing that Smart Currency Business had been appointed partner and recommended service provider to the British Antiques Dealers’ Association (BADA). It seems only right that for an organisation like BADA, who place such great emphasis on establishing and maintaining confidence between its members and the public, that they have forged a partnership with a trustworthy company who dedicate their time to getting to know and meeting the needs of their valued clients”.

Managing your foreign currency exposure effectively is a vital requirement of any business that deals internationally. For more information, get in touch with the team at Smart Currency Exchange on 0207 898 0503.

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Imagro UK - Case Study

In the plastics and rubber industry even the smallest margin can have an enormous knock-on effect on all areas of the business. This makes it vitally important to have an effective currency strategy in place in order to limit loss and allow focus to remain on maximising profit.

Imagro UK formed back in 2009 following the acquisition of LG International UK’s polymer division. As they specialise in importing polymers from the Far East and from across Europe, each month they need to transfer large sums of US dollars, sterling and euro to pay their various suppliers and offices around the globe. Only a few short years after inception, Imagro UK had established themselves as a major partner for the sales of LG Chemicals and a number of leading polymer producers. With this success came the need to implement an effective currency transfer strategy and that’s where Smart Currency Business could help.

Managing Director, Matthew Sydenham revealed how Imagro UK came to enlist Smart’s services: “We weren’t getting great rates from any of the three or four banks that we were using back then and they were never able to tell us when our contracts would be finalised. This meant that it was a case of placing an order for a currency exchange and then sitting around, twiddling our thumbs and waiting with baited breath to discover what rate we had been lumped with when they finally got around to dealing with it. That just wasn’t going to work for us so after I was recommended Smart by a contact; we got in touch and have been working with them for almost a year now”.

You might wonder how exactly Smart can help with the tight margins experienced throughout the supply manufacturing industry. Matthew continued: “We need to make sure that we’re constantly focused on limiting our losses. We do this by setting a target exchange rate for each month that we would like to achieve. If we have time, Alex Bennett, Head of Sales, will lock in the rate with a Forward Contract or he will watch the rate until it reaches a satisfactory level that we are happy to trade at”.

Matthew elaborated on Alex’s personal service: “Alex calls us regularly with interesting ideas about how he can help us further and how we can improve the ways that we operate. It’s good having someone like that working to help you. The proactive relationship management that we enjoy from Smart is refreshing when you are used to encountering FX companies who are all about getting your business but who have no interest in dealing with you in the professional, efficient and accessible way that the Smart team do”.

Managing your foreign currency exposure effectively is a vital requirement of any business that deals internationally. For more information, get in touch with the team at Smart Currency Business on 0207 898 0500.

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Robust currency strategy a ‘must have’ for businesses wanting to protect their international trade

The Chancellor of the Exchequer, George Osborne has set a target of one trillion – or one thousand billion – for the value of UK exports by 2020. Some might say this is an overly ambitious target, especially as recent figures showed that UK exports actually fell for June amid ongoing global uncertainty.

However, while the Chancellor’s target may well have been set with headline writers in mind, I also happen to think that putting exports at the heart of economic strategy and raising the profile of exporting generally sends out exactly the right signal to UK companies right now. In an era of globalisation, countries that have buoyant exports sectors are better placed to improve living standards as a whole – just ask Germany, the world's third largest exporter with $1.408 trillion exported in 2011.

In many industries in the UK, where local markets are becoming increasingly saturated and demand is – in many cases - contracting, having an international arm is now a necessity.

The only note of caution I would sound with regards to exporting is the issue of foreign exchange. As currencies around the world continue to fluctuate significantly, a robust currency strategy is becoming a ‘must have’ for those of you engaged in international trade. The likes of the Indian rupee, the US dollar, the euro and UK sterling are all seeing ongoing volatility as authorities around the world continue to scratch their heads about the issue of debt. Implementing a currency strategy can negate the currency fluctuation risks for companies engaged in international trade.

At Smart Currency we adopt a range of techniques such as forward contracts and spot contracts to provide stability to UK exporters and importers. We also help exporters to maximise margins by offering significantly better-than-bank currency exchange rates.

Until worrying debt issues in the likes of Greece, Spain and Italy are resolved, we can expect to see more currency swings in the coming months. Whether you import or export, now is the time to hedge your bets by adopting a sensible currency strategy to protect yourself from further market volatility.

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Smart take pole position for Classic Grand Touring

It may sound like a dream come true – hosting classic car rallies through beautiful landscapes in Europe surrounded by just the thrum of powerful engines and the chatter of fellow car enthusiasts – however without the capacity to make international currency transfers with ease, it could become a logistical nightmare.

This was the conundrum faced by Classic Grand Touring before they discovered Smart Currency Exchange. With over 25 years’ experience in the field between them, father and son team Nick and Thomas Brimblecombe formed Classic Grand Touring to offer bespoke and pre-arranged driving tours to the world’s finest motoring events. Thomas explained what they do: “We specialise in car tours and rallies to historic events– all of which are based in Europe, mostly in France but we go out to Spain, Italy and Portugal as well. The most recent tour we went on was Le Mans Classic. I put together the itinerary to the event, all the routes, the hotels, tickets and hospitality -we take care of everything”.

Prior to being recommended the services of Smart, Classic Grand Touring had enlisted the help of a private bank to make their international currency transfers: “When I look back and compare the service that we received there with how easy things are after signing up with Smart Currency Exchange, things don’t even come close. The rates we were offered before were terrible and an extortionate fee was added on to every single transaction”.

After becoming increasingly exasperated with their bank Thomas decided to act upon a recommendation he had received from a business contact. Thomas contacted Smart and after speaking to Currency Consultant, Bryan O’Connell about the services they could provide, Classic Grand Touring were quick to sign up.

“We’ve been using Smart’s services since around April this year. We signed up just in time, with such a busy schedule and sometimes up to 90 people on our tours it is absolutely essential that we can transfer sterling into euros or Swiss francs and make payments to our suppliers quickly and easily. I’m pleased to say that they service that we have received from day one has been nothing short of exemplary”.

Thomas continued; “It’s the ease of use that really appeals to us. After the initial sign-up we were assigned Siobhain Barry as our personal trader. She is fully aware of how Classic Grand Touring operates and what is important to our business. After a quick call with her, she will let me know the rates and then the transfer is made. It’s the ease of use that is the main appeal to us – the fact that I can be anywhere in the world and the process is still seamless. This is what has led us to recommend Smart to friends, clients and contacts”.

Managing your foreign currency exposure effectively is a vital requirement of any business that deals internationally. For more information, get in touch with the team at SmartCurrency Exchange on 0207 898 0503.

What does sterling’s recent rise spell out for exporters?

As I write, sterling stands at 1.27 against the euro and 1.55 against the USD. Our forecasts for GBP/EUR are 1.27 (3-months) and, again, 1.27 (12 months) while for GBP/USD they are 1.55 (3 months) and 1.54 (12 months). Sterling’s rise against the euro has come on the back unrest and uncertainty in the eurozone. 12 months ago the rate for GBP/EUR was 1.12, and that increase in its value has directly hit margins for exports.

The euro has weakened against sterling and other currencies on the back of grave uncertainty around the economies of some of its key member states. Spain, Ireland, Italy, France and, of course, Greece face significant debt issues.

And yet, while the eurozone has its problems, the UK does too. The UK economy slipped back into recession during 2012. The Bank of England’s monetary policy of quantitative easing and rock bottom interest rates are designed to help kick-start the economy but they also serve the duel purpose of weakening sterling, which helps export markets.

Looking at the bigger picture, one could sum up the exchange rate situation by saying that, while the euro hardly represents a safe haven for investors, neither does sterling. The aforementioned exchange rate predictions are based on current knowledge and that all other things will remain equal.

However - and this is the critical point – if recent months have taught us anything it is to expect the unexpected. There are a number of eminently possible events – one or more countries leaving the eurozone or the markets perhaps setting their sights on the UK’s own debt issues – which would impact dramatically on exchange rates. As many exporters will be aware, sudden shifts in exchange rates can quickly erode the profits on a deal.

Moving forward, I firmly believe an export strategy represents the best bet for businesses in an uncertain world. However, I would urge businesses trading globally to consider using hedging techniques such as forward buying as part of an overall currency strategy. Exchange rate movements will always impact on international trade generally but by planning ahead and giving some thought to currency issues, exporters can ensure that their hard work in securing and executing a foreign contract is not undone by unexpected exchange rate movements.

For further information and your free report visit www.SmartCurrencyBusiness.com or call 0207 898 0500.