Stepping into the Eurozone– top tips on overseas trading

The UK has strong ties to the Eurozone, with euro countries being our biggest trading partners by far, in particular France and Germany (UK/German bilateral trade is valued at around €153bn). The strong cultural ties, open market and political climate encouraging free trade between member countries makes the EU an attractive option for thriving UK businesses looking to expand overseas.

 

However, whilst most of the barriers to trade have melted away in the world's largest trade-bloc, UK businesses still need to be mindful of the foreign exchange market and how the GBP/EUR rate will impact their exports to, and imports from the continent. Not to mention fully understand all the associated costs 

 

So for businesses keen to dip their toes into overseas markets, Andrew Woolley,

Executive Director of International Payments at Moneycorp, talks through the main considerations for British companies.

 

“One of the first things any exporting business should do is gain a good understanding of the currency volatility and the market of the country you are exporting to. Many businesses are unaware that they can use a foreign exchange specialist to help them hedge against currency risks. A forward contract allows a business to lock in an exchange rate for a period of time ranging from three months to two years – helping to manage any potential risks when dealing with volatile currencies.

 

“The next step is to ensure you are maximising profit margins while trading in foreign markets. Businesses need to be conscious of the unforeseen costs associated with

exchanging money internationally. For example, it is worth considering whether both the UK sending bank and the overseas receiving bank charge transaction fees.

 

“Our final tip is to take into account all the associated costs of trading internationally and supply a quote in the local currency, making it easier for the customer to work towards internal budgets."

 

If your business is looking to expand into the Eurozone consulting with Moneycorp's experts could save you a considerable amount of time, money and effort on your international payments, letting you get on with seizing opportunities and expanding into new markets.