You know the saying ‘America catches a cold and the world sneezes’, well it still pretty much applies, even in a world of developing nations, a rising Chinese economy and a growing Eurozone.
So is it all change at The Federal Reserve? And what could it mean for us in old blighty.
Upcoming Changes at Federal Reserve
Do you remember when Man Utd used to win football games? The only difference between this year and last is the person in charge. This month sees Ben Bernanke hand over to Janet Yellen, so a change in charge of the US Federal Reserve.
Any change leads to some uncertainty, so will Janet Yellen look to make her mark?
The US Dollar
For businesses trading with the US it may be a good time to look at how you manage your foreign exchange exposure. Even those businesses trading just a little with the US should not underestimate the impact of small exchange rate movements.
This comment on dollar exchange rates was made by Carl Hasty, director of Smart Currency Business;
“Businesses trading with the US or planning on doing so may want to weigh purchasing currency at current rates with the prospect of facing a potentially stronger US dollar with less favourable exchange rates further down the line.”
A cautionary note and one well worth bearing in mind. Add that to a change in leadership at the Federal Reserve and it is worth taking the comments on board.
There is more good exchange rate information available here. For any business thinking of managing their foreign exchange on-line then please be aware of the risks associated with this.
The problem with changes in leadership and exchange rates is that there is uncertainty. The worst thing for any economy is uncertainty. The next few weeks will show what happens, in the meantime it would be good practice to exercise some caution if you are trading with the US.
By Dave Farmer
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