Currency Services for Importers and Exporters
Protect the margin on goods you have already priced. Forward cover for an order book, spot execution for invoices falling due, and a named dealer who understands that a shipment date and a payment date are not the same thing.
For importers and exporters, currency risk begins when the price is agreed, not when the invoice is paid. A quote given today and settled in 90 days is an unhedged position for those 90 days, and on typical trade margins a 3% currency move can remove most of the profit on the order. The usual answer is a forward contract covering committed orders, spot for invoices already due, and a bank margin of 3% to 4% replaced by a specialist margin of 0.2% to 1%.
GBP
EUR
Mid-market rate shown for reference. Your dealt rate includes a small broker margin.
GBP to EUR Exchange Rate History
Look at the 1-year range on the chart above and compare it with your net margin. For most importers and distributors the annual range in GBP/EUR is wider than the margin on the goods — which is the entire argument for treating currency as a cost line rather than an afterthought.
Where the currency risk actually sits
The mistake most trade businesses make is dating the exposure from the invoice. It starts earlier than that.
The moment you quote a customer a price, or accept a supplier's price, you have taken a currency position — because one side of that transaction is now fixed in a currency and the other is not. If you quote in sterling and buy in euros, every day between the quote and the payment is a day your margin can move. On 30, 60 or 90-day terms that is a meaningful window, and it is entirely invisible on the P&L until the invoice settles.
Who this is for
Importers and distributors
Buying stock in euros or dollars and selling in sterling at a published price list. The margin is set at the point the list is printed, so an adverse move is absorbed rather than passed on.
Exporters and manufacturers
Selling into the EU, the US or further afield with foreign-currency receipts on terms. A strengthening pound erodes the sterling value of an order book that has already been won.
Wholesalers on long lead times
Where order, shipment and payment sit months apart — furniture, machinery, seasonal goods — a single order can span a wide currency range from confirmation to settlement.
Businesses with both sides
Buying in euros and also selling in euros creates a natural hedge worth quantifying before buying any cover at all. Sometimes the right answer is to hedge only the net position.
Worked example: a £250,000 order book
Figures use illustrative GBP/EUR rates so the arithmetic is easy to follow. Live rates will differ.
Scenario
A UK distributor confirms €300,000 of stock from an EU supplier, payable in 90 days, and has already published a sterling price list built on an assumed rate of 1.17 — an expected cost of £256,410 and a planned gross margin of 12%.
| Outcome at settlement | Rate | Sterling cost | Effect on the order |
|---|---|---|---|
| Planned | 1.1700 | £256,410 | Margin as budgeted |
| Sterling weakens 3% | 1.1349 | £264,340 | £7,930 of margin gone |
| Sterling weakens 6% | 1.0998 | £272,777 | £16,367 of margin gone |
| Hedged with a forward | 1.1700 | £256,410 | Margin protected |
On a 12% gross margin, the 6% adverse case removes roughly half the profit on the order — on goods that were bought well, sold well and delivered on time. Nothing about the commercial performance changed. Only the rate did.
The most useful question for a trade business is not "where is the rate going" but "what rate did you build the price list on". Once there is a number in the plan, the job is simply to defend it — and a forward at or near the budget rate does that for the whole order book at once. Businesses that hedge to a stated budget rate stop having the conversation about timing altogether.
The tools, and when each fits
| Tool | What it does | When it fits |
|---|---|---|
| Spot transfer | Converts now at today's rate, settling in a couple of business days | Invoices already due with funds in hand |
| Forward contract | Fixes a rate for a dated future settlement, against a 5–10% deposit | Confirmed orders on 30 to 90-day terms; a season's buying |
| Window forward | Fixes a rate with a drawdown period rather than one date | Shipment dates that are expected but not confirmed |
| Limit order | Converts automatically if the market reaches your target | Non-urgent conversions where you have a level in mind |
| Natural hedge | Matching currency income against currency costs | Businesses buying and selling in the same currency |
Most trade businesses end up using two or three together — forwards over the committed order book, spot for the tail, and a limit order on anything genuinely flexible. Our guide to FX hedging strategies covers how the mix is usually built.
Paying EU suppliers: what changed
For a purchase ledger this cuts both ways. It is a real defence against a fraudulent change of bank details — the classic invoice redirection attack — but it also means a supplier's trading name that differs from their registered account name will now stop a payment that used to go through. Worth cleaning up beneficiary records before it holds up a shipment.
Common mistakes to avoid
- Pricing a list on last year's rate. A price list is a currency position with a shelf life. State the rate it assumes, and hedge to it.
- Hedging the invoice rather than the order. By the time the invoice arrives, most of the exposure window has already passed.
- Hedging a forecast as if it were a commitment. A forward is binding. Cover confirmed orders; treat the pipeline separately.
- Ignoring the natural hedge. If you buy and sell in euros, hedging the gross rather than the net position costs money and achieves nothing.
- Sending trade payments by SWIFT wire and expecting the full amount to land. Correspondent banks can deduct fees in transit, leaving a supplier short-paid and an account on hold.
- Judging the bank on its fee. A £25 charge is visible; a 3.5% margin on £250,000 of annual purchasing is roughly £8,750 and appears nowhere on the statement.
Regulation and your money
Cambridge Currencies is not itself FCA-authorised. Payments are arranged through FCA-authorised partners — Currencycloud (FRN 900199) and ScioPay (FRN 927951) — and client funds are safeguarded by those partners.
The FCA states that if a non-bank payment provider goes out of business, "your money won't be protected by the Financial Services Compensation Scheme (FSCS)". Firms "must either put your money in a separate safeguarding account with a bank, or protect it with an insurance policy or similar guarantee", and if the firm fails "you should get most of your money back. But it may take some time to receive, and it may not be the full amount". Source: Financial Conduct Authority. That applies to every UK currency broker; you can check any provider on the FCA Financial Services Register.
Protecting the margin on your next order?
Speak to a Cambridge Currencies dealer about your order book, your budget rate and your payment terms. Every trade is confirmed by phone before it is booked, and there is no cost to talk it through.
Frequently asked questions
How do importers and exporters hedge currency risk?
Most use forward contracts over their confirmed order book, fixing the rate for payments due in 30 to 90 days, with spot transfers for invoices already due. Where shipment dates are uncertain, a window forward gives a drawdown period rather than a single settlement date. The starting point is the rate the business built its pricing on.
When does currency risk start on an export order?
When the price is agreed, not when the invoice is raised. If you quote a customer in euros and get paid 60 days after delivery, the exposure runs from the quote to the payment — often three or four months in total on a long lead-time product.
Should I invoice in sterling or the customer's currency?
Invoicing in sterling moves the risk to the customer and is simpler for you, but it can cost you the order against a competitor who quotes in their currency. Invoicing in their currency wins business and keeps the risk, which is then hedgeable. It is a commercial decision with a hedging consequence rather than a purely financial one.
Do you support multiple currencies?
Yes, including all the major trade currencies — EUR, USD, CNY, JPY, CHF, CAD, AUD, SEK, NOK, PLN and others. Your dealer will confirm availability, settlement timing and cut-offs for the specific route before anything is booked.
What documents do you need to open a business account?
Certificate of incorporation, registered office address, the names of the directors and senior management, and identification and proof of address for directors and anyone holding more than 25% of the company. This follows regulation 28 of the Money Laundering Regulations 2017, which also prevents a firm relying solely on the companies register to verify beneficial ownership.
Is there a minimum transaction size?
We work mainly with larger transfers, typically from £5,000 upwards. Below roughly £1,000 a transfer app is usually simpler; above about £3,000 the margin difference against a business bank account starts to be worth the process.
Can I fix rates for a whole season's buying?
Yes. A series of forward contracts, or a single larger contract with staged drawdowns, can cover a season's committed purchasing at one rate. This is common in seasonal goods and food importing, where the buying calendar is known well in advance.
Is Cambridge Currencies regulated?
Cambridge Currencies works exclusively with FCA-authorised payment partners. Payment services are provided by Currencycloud (FRN 900199) and ScioPay (FRN 927951), both authorised and regulated by the Financial Conduct Authority. Cambridge Currencies is not itself FCA-authorised. Client funds are held in segregated safeguarded accounts.