The pound has made a small recovery against the dollar during the last few days, following the mini-budget crisis that has been widely reported.
If you know your Spaghetti Westerns, then you may appreciate our title, but following the same theme you may have preferred ‘For A Few Dollars More’.
Since the upheaval of the recently announced mini-budget, and a slight recovery, the pound seems to be hovering this month around the $1.12 mark.
When we compare this to the levels witnessed this time last year, this has a varying impact on imports and exports.
The Good
Our exports to countries trading in USD have become cheaper to buy, so it is a good time to be selling exports.
The Bad
Products bought from countries trading in USD have become more expensive in sterling.
The Ugly
Most freight costs are calculated from a USD base, therefore they will cost more in pounds sterling.
This time last year you could buy around 1.38 dollars for every pound, which means sterling has dropped around 26 points.
To simplify that, an order costing around $50,000 would have cost a UK importer £36,231 this time last year, but now costs £44,642. In other words 23.2%. more.
However, the positives for exporters are that a £50,000 sales order now costs a potential American customer $56,000, instead of $69,000 twelve months ago.
So, now may be a good time to revisit some of those old export contracts or quotes to take advantage of the current climate.
If you have any questions regarding the above, then Westbound are here to help. So, please do not hesitate to contact us.
