Problem-solving - Recent FX Movements and It's Impact
- 01:49
Investment Banking Superday interview problem-solving - Discuss recent FX movements and it's impact.
Downloads
No associated resources to download.
Transcript
Now we're going to have a little look with an additional bit.
Your bakery sells Panettone the US.
So a cake, that you can deliver to the US.
Could you discuss a little bit in the past few months, the FX movements that's happened? What does that mean to you as a business owner in the UK that sells to the US? if I didn't understand FX, how would you explain that to me? Okay, so FX is obviously foreign exchange.
So it's the sort of rate at which we would exchange if we were talking about the US the pound for the US dollar.
And what we've seen over the last few months is that the US dollar has appreciated a lot substantially in value, especially relative to the pound.
so recently it dipped down as low as 1.03, dollars per pound, and now it's at stabilized at around one point 12, which is still sort of significantly lower than what we would expect.
And as a business, if we're based in the UK and we're selling to the us, that would actually be, a positive thing for us because if we're selling to the US and we're collecting dollars and then we would exchange that back into pounds, we would get more pounds for the dollars that we're receiving.
So it would be quite a positive thing for us.
But if we were importing anything from the US, then that would be a problem because, um, our costs would be significantly higher.
So it's, it's a good thing that we're exporting the, the goods there.
Yes. Thank you. That's very helpful.