Coping With Market Volatility: Handling foreign currency fluctuations. For decades, large multinational companies have recognized that currency fluctuations can have an

impact on the bottom line for cross-border transactions. To help them better control their costs, they buy

and sell currencies using trading techniques that are beyond the reach of most small businesses or

institutions.

Yet in todayʼs global economy, large multinational corporations arenʼt the only ones who need to think

about their exposure to foreign currencies. With small- and medium-size businesses now accounting for a

third of all U.S. exports, according to the Department of Commerce, merchants who sell internationally,

small manufacturers who buy raw materials abroad, or even colleges who pay employees overseas or

accept payment from foreign students in a variety of currencies should factor currency fluctuations into

their plans.

MAKING FOREIGN CURRENCY PAYMENTS

For the convenience of your valued overseas customers and suppliers, you may be making payments in

their currency rather than insisting that transactions take place in U.S. dollars. But doing business in those

currencies requires finding ways to convert money quickly and seamlessly, while at the same time helping

you to minimize the impact of currency fluctuations. Foreign currencies fluctuate constantly. If you make

frequent payments in a variety of currencies, you may find it difficult to predict and control your costs.

Even incremental changes in value can impact your cash flow—the lifeblood of any business or

institution.

Monitoring foreign currencies on a daily basis could become a full-time job—and you have an

organization to run. And, since rates change constantly, you can hardly be expected to spend your days

monitoring fluctuations. Hereʼs where a service such as American Express® FX International Payments

can help. Our FX forward contract allows you to lock in an FX rate for an upcoming international payment

months in advance. Once you have an FX forward contract in place, you can more accurately forecast

your costs, since you know how much it will cost you to purchase the foreign currency for that upcoming

international payment

   

 

VITAL RECORDS

International transactions can also complicate your record-keeping system. For tax and budget purposes,

you need quick, accurate information on all of your transactions. Yet, when you factor in overseas sales

and purchases, translating those transactions from euros or yen into dollars can be a confusing process—

not something you want to handle at the same time as youʼre calculating quarterly or annual taxes.

Safe storage of your receipts is a must, and you also need a quick, clear way to get a comprehensive

view of your transactions. FX International Payments offers a streamlined, comprehensive international

payment system that can provide you with payment histories by transaction status, currency, and date

online.

With each step that adds clarity or predictability, cross-border transactions become that much easier and

more natural, until having the whole world at your fingers feels as natural as doing business with the shop

around the corner.

American Express is not providing you with legal, tax or financial advice. We recommend that you consult your own advisers to determine whether and how to use the FX International Payments service.