Global Markets & FX: What UK SMEs Should Know This Week

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What's going on? If you’ve been watching the news or even just your cost of importing parts or raw materials, you’ll know that things are getting… spicy. The Dollar has taken a knock, the Pound is holding strong (for now), and the Euro is nervously watching from the sidelines. This is no ordinary market flutter — it’s the prelude to what’s being dubbed “Liberation Day,” thanks to the Trump administration’s announcement of sweeping new tariffs. So, what does it mean for you, the UK business owner? Let’s break it down. The Tariff Trouble: What’s Triggered It? Over the weekend, Donald Trump confirmed the US will impose reciprocal tariffs on all countries, effective 2nd April. That includes the UK, EU, Canada — the lot. Markets reacted quickly and nervously. The US Dollar index slipped for the third day running, while Sterling held relatively firm and even gained ground on the Dollar and Euro. Tariffs are set to hit EU car exports first, with a flat 25% on any vehicle not made in the USA. The EU has already promised retaliation. So, we’ve got: A potential full-blown trade war brewing. Worries about global inflation returning. Investors pulling back from risk. UK and EU exporters in the crosshairs. How Currency Is Moving – And Why It Matters USD : Investors are ditching the Dollar. Why? Because tariffs risk economic growth and may force the Fed to hold off further rate hikes. The greenback has lost ground against both the Yen and Sterling. GBP : The Pound is surprisingly stable. Prime Minister Starmer’s “productive talks” with Trump didn’t prevent the tariff threat, but Sterling has remained above 1.29 against the Dollar and 1.19 against the Euro. EUR : The Euro has crept up slightly — mostly because the Dollar is wobbling. But with Germany heavily reliant on car exports to the US, this trade standoff could hit the Eurozone economy hard. To add fuel to the fire, the ECB just cut interest rates by 25bps, and may need to go further. What Does This Mean for UK SME Owners? If you’re importing goods priced in USD or exporting to Europe, the FX markets are going to start affecting your margins — if they haven’t already. Let’s take a couple of examples: Importer of electronics or components from China or the US : The weakening Dollar might look helpful — goods priced in USD cost less in GBP. But beware: tariffs could push base prices up. Exporter of UK-made machinery to Germany : The Euro’s wobble could make your goods relatively more expensive in Europe, even before EU retaliation hits confidence and demand. Don’t Panic — But Do Prepare This isn’t a time to bury your head in the sand. You don’t need to be a currency trader to manage FX risk — but you do need to be aware. Here are a few practical steps to consider: Review your foreign currency exposure : Which contracts, invoices or suppliers are USD or EUR-denominated? Talk to your bank or FX provider : Ask them about forward contracts or hedging tools. Scenario test your pricing : How sensitive are your margins if GBPUSD hits 1.25 or EURGBP shifts to 1.10? Watch out for knock-on effects : Global inflation, slower growth, tighter credit — it all filters down to SME trading conditions. The Bigger Picture We’re heading into a volatile Q2. The FTSE 100 dropped nearly 1% on Monday, and financial stocks are feeling the squeeze. Risk appetite is down. This isn’t just a blip — it’s policy-driven turbulence, and it could persist well into summer. UK SMEs — especially those in manufacturing, import/export, or with international supply chains — should keep close tabs on currency movements and trade policy headlines. Self-Test: What Should You Be Asking Yourself? How much of my revenue or cost base is exposed to USD or EUR currency movements? Have I reviewed my pricing strategy in light of recent FX volatility? Am I using any FX tools to hedge risk, or am I leaving it to chance? What would a 5–10% swing in either direction do to my cash flow or profitability? Final Thoughts It’s tempting to assume that trade wars and currency swings are for the “big boys” to worry about. But for many SMEs, this sort of disruption can mean the difference between hitting your profit targets or missing them entirely. At Branta, we help businesses like yours navigate financial uncertainty, structure for resilience, and plan for sustainable growth — even in volatile conditions. If you’d like a no-obligation chat about your FX exposure, debt refinancing options or M&A strategy, give us a ring . We speak fluent SME.

Branta supported a Hampshire-based BCorp haircare manufacturer, in achieving a successful strategic sale after a previously stalled process. This case study outlines how Branta structured the outreach, managed buyer interest, and helped deliver the right exit for the business and its shareholders.

Foreign exchange (FX) is an essential part of doing business internationally, but for many SMEs, it’s also a source of unnecessary cost and risk. Many businesses assume they’re getting a good deal from their bank or FX provider, without realising that hidden fees, unpredictable margins, and inflexible contracts could be eating into their profits. At Branta, we help SMEs take control of their FX strategy—reducing costs, improving certainty, and freeing up working capital. This article explores the common pitfalls of FX transactions and how businesses can optimise their currency dealings for better financial outcomes. The Problem: Hidden Costs and Missed Opportunities in FX Most SMEs don’t have full visibility over the costs of their FX transactions. A key driver of these costs is the dealer profit margin —the amount added to the exchange rate by banks and brokers before they sell currency to you. Many FX providers vary this margin from transaction to transaction , making it difficult to predict costs. This margin is technically known as the spread —the difference between the price at which they buy currency and the price at which they sell it to you. For example: If the market exchange rate for GBP/USD is $1.22 and your bank sells you USD at $1.18 , the difference ( $0.04 per £1 exchanged ) is the spread . That may not seem like much, but on a £100,000 trade , this difference amounts to £3,389 in additional cost . Beyond spreads, many businesses also pay: Deposit requirements for forward contracts – Many providers demand an upfront deposit (5-10% of the total trade) to secure a future exchange rate, tying up cash unnecessarily. Foreign payment fees – Banks often charge between £10-£25 per international transaction , which adds up over time. Lack of FX strategy support – Many businesses make FX decisions without expert guidance, leading to higher costs and increased risk. These hidden costs can result in thousands of pounds in unnecessary FX expenses every year . The Solution: A Smarter FX Strategy At Branta, we help businesses improve cash levels by fixing dealer margins , eliminating fees , and introducing strategic FX planning . Here’s how: 1. Securing a Fixed, Narrower Margin on FX Transactions Rather than accepting fluctuating FX costs, businesses can fix a transparent , lower dealer margin , ensuring they always know what they’re paying. Client Case Study: UK Food Manufacturer Our client was unknowingly paying dealer margins ranging from 0.5% to 2% , meaning the cost of their FX transactions varied unpredictably. By securing a fixed , lower margin , they gained certainty over their FX costs and eliminated unnecessary price fluctuations. client Example: Consumable Product Manufacturer Using a High Street Bank for FX Our client assumed they were getting competitive rates by booking FX directly with their high-street bank. However, an analysis of their trade confirmations revealed they were overpaying by £10,000–£15,000 per year due to inconsistent margins. By switching to a provider offering fixed , lower FX margins , they locked in certainty and improved their profit margins. 2. Zero-Deposit Forward Contracts Many businesses use forward contracts to protect against currency fluctuations by locking in an exchange rate for future payments. However, most FX providers require an upfront deposit (often 5-10%), which can tie up tens of thousands of pounds in working capital . Client Example: £500,000 Forward Contract Facility Our client needed to secure USD payments for their suppliers. Their previous provider required a 3% deposit on forward contracts , meaning £15,000 was locked up unnecessarily. By switching to a zero-deposit forward contract , they freed up this cash while still protecting their future FX rates. Client Case Study: Importer Making USD Payments A business making USD payments 2-3 times per year was using a major bank that charged a 3% dealer margin plus a £25 settlement fee per transaction . For a $50,000 purchase , they were paying: Bank rate at $1.18 = £42,372 Alternative provider rate at $1.21 = £41,322 By switching, they saved £1,050 per transaction and avoided settlement fees altogether. Over a year, these savings added up to £3,000+ , simply by improving their FX setup. 3. Strategic FX Guidance and Market Insights Many SMEs navigate the FX market alone, making costly decisions based on guesswork. Having access to a dedicated FX expert can help businesses: ✅ Time their FX trades better with market insights ✅ Set budget rates to protect against unexpected currency movements ✅ Use hedging strategies to reduce FX exposure client Example: Timing a Large USD Purchase A UK business needed to buy £120,000 of USD for upcoming payments. Instead of blindly trading on the day, they worked with their new FX trader to lock in a competitive rate before the market moved against them—potentially saving thousands. 4. Eliminating Foreign Payment Fees Many businesses are unaware that their bank is charging fees on every international transfer. With the right FX provider, these costs can be completely removed . client Example: Spot Trade Savings Our client purchasing USD and CNH from a major bank was consistently overpaying due to inflated margins. A review of their trades showed: £725 saved on a $70,850 trade £44 saved on a CNH 39,500 trade £31 saved on a $4,100 trade Even small differences in the FX margin quickly add up. For businesses making regular FX payments, these hidden costs could amount to tens of thousands of pounds annually . How Much Could Your Business Save? By reviewing their FX strategy, SMEs can often recover thousands of pounds per year . Real-world examples include: EUR purchases: €3.1m per year → Estimated savings: £10,400 per year Deposit savings on forward contracts → £33,000 released back into the business USD purchasing strategy savings → £1,050 per transaction These savings don’t include additional non-financial benefits such as improved planning and risk management . Are You Getting the Best FX Deal? To find out, all we need is three recent FX trade confirmations from your current bank or FX provider . We will: ✅ Analyse your current dealer margin and fees ✅ Show you exactly how much you could save ✅ Offer a simple transition to a better FX solution This review is free and without obligation , but could reveal thousands in hidden savings for your business. Self-Test: Is Your FX Strategy Costing You Money? Do you know the exact dealer margin (spread) you are paying on FX transactions? Are you required to pledge a deposit for forward contracts? Do you pay foreign transaction fees on international payments? Do you have a dedicated FX expert to help guide your strategy? If you’re unsure about any of these, it might be time to review your FX setup. 💡 Contact Branta today to explore how we can help you cut FX costs and gain certainty over your currency transactions.

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