Currency volatility 'can be used to firms' advantage'

Britain’s corporations must get smart to protect themselves against currency fluctuations, an expert in the sector has claimed.

Rupert Lee Brown, chief executive of Caxton FX, said that the recent sterling volatility could prove to be good news for some firms if they handle their investments carefully.

The pound has fallen from over $2 against the dollar last year to a 24-year low of $1.35 in January, only to rebound to above $1.65 last week.

Sterling experienced similar losses and gains against the euro, with a low of €1.02 plumbed in December 2008.

Caxton FX currently advises businesses to use hedging strategies and currency brokers in order to maximise gains from the changing markets.

Mr Lee Browne added: ’The alarming change for businesses in the last year has not just been the scale of the devaluation or revaluation of the pound in that period but the changes in the direction of the currency are happening at a much faster pace than in the past.

’That makes it much harder for businesses to protect their profits even on projects that are completed over a period of months let alone years.’

Mr Lee Browne’s comments were contained in a guide published by the Confederation of British Industry last week.ADNFCR-2318-ID-19218710-ADNFCR