If you import, export, or operate anywhere along a global supply chain – congratulations. You’re in the FX game.
Whether you like it or not, moving money across borders means managing exposure to shifting currencies, evolving monetary policy, and a geopolitical landscape that seems to change by the hour.
And yet, many trade-heavy businesses treat FX as background noise, something to think about after the deal’s done, the invoice’s issued, or the margin’s gone missing.
It’s a costly mistake.
Because the risks of importing and exporting go far beyond shipping delays or trade compliance. Currency volatility sneaks in through pricing structures, payment terms, and hidden exposure buried deep in the supply chain.
In this piece, we’ll break down how importers and exporters are affected differently. Why FX exposure goes far beyond your own contracts, and what smart CFOs are doing to future-proof their FX strategy in a world where ‘business as usual’ rarely lasts for more than a week.
Why Importing and Exporting Create Currency Risk
Let’s start with the obvious: when your business trades internationally, your costs and revenues are influenced by more than just supply and demand. They’re shaped by FX markets, which don’t always play fair.
Here’s how it plays out for many businesses:
- You’re importing goods from abroad. The price is fixed in USD, but by the time you settle the invoice, the GBP has weakened. That same order is now 3–5% more expensive, and the difference goes straight to your bottom line – or rather, off it.
- You’re exporting to a buyer overseas. They want to pay you in their local currency. You agree, but before the deal settles, the exchange rate moves and your expected profit quietly slips through the cracks.
In both cases, the risk isn’t just theoretical:
- It’s real-world cash flow.
- It’s margin pressure.
- It’s supply chain renegotiations, boardroom questions, and sales forecasts that no longer add up.
And it’s completely avoidable (or at worst more predictable) – if you’ve got the right FX strategy in place.
Importers vs. Exporters: Different Risks, Shared Vulnerability
Let’s break this down a little further:
Importers:
Your most significant exposure is cost inflation.
If your local currency weakens against the currency of your supplier, you end up paying more to receive the same goods. And because you’re often locked into fixed pricing with your customers, it’s not always possible to pass those costs on – at least not without a commercial fight.
Over time, these small shifts can compound, draining your margins and making previously profitable contracts look much tighter.
Exporters:
Your challenge is usually revenue compression.
When your home currency strengthens, your products or services become more expensive in overseas markets. You either reduce price (and sacrifice profit) or hold firm (and risk losing competitiveness).
Neither option is great, and for businesses in price-sensitive sectors, this can mean lost deals, shorter contract durations, or constant renegotiation just to stay in the game.
In both cases, volatility can trigger a chain reaction: budgets start to drift, margins get squeezed, and financial reporting becomes a defensive exercise.
Crucially, none of this needs to happen if the proper measures are in place.
FX Risk Doesn’t Stop at Your Balance Sheet
Here’s where things get more subtle and more serious.
Even if you don’t transact in foreign currency, your suppliers (or their suppliers) might. And their exposure becomes your risk, even if you never touch a cross-border payment directly.
Let’s say:
- You’re a UK-based manufacturer buying from a local supplier
- That supplier sources materials from Asia, priced in USD
- The dollar strengthens unexpectedly
- Their costs go up, and your unit cost follows
This kind of indirect FX exposure is one of the most underappreciated risks in modern supply chains. And it’s often not flagged until margins start thinning or contracts need to be renegotiated mid-term.
Multiply that across multiple suppliers and tiers, and you’ve got FX risk embedded into your cost base – one you can’t see unless you’re looking for it. The more global your supply chain, the more likely it is that FX volatility will land in your lap, whether or not you’re directly involved in foreign transactions.
This ripple effect is particularly important in industries with globalised sourcing and long lead times. If you’re not asking how FX might affect your suppliers’ costs, payment terms, and price stability, you’re probably missing something.
Real-World Sector Scenarios
Let’s take a look at some hypothetical, but very realistic situations:
Manufacturing:
A UK-based manufacturer sources components in USD from China, assembles them locally, and sells finished products to the EU in EUR. Currency moves in either direction affect both cost of goods sold and revenue, squeezing margin at both ends. With payment terms often stretching 60–90 days, the business is exposed even before production begins.
Ecommerce:
An EU-based ecommerce seller receives payments in EUR, pays advertising and platform fees in USD, and sources products from UK suppliers in GBP. Each stage of the transaction involves FX, and when volume scales, so do the hidden costs – unless the business is actively managing those exposure points.
SaaS / Tech:
A UK-based SaaS company bills international customers in their local currencies – AUD, CAD, USD – but reports in GBP. If those currencies weaken, revenue looks smaller when converted back to sterling, creating fluctuations in reported growth and adding noise to performance metrics. Worse, investors might misread volatility as performance issues.
Commodities & Energy:
Input prices are often globally set in USD, while revenue may be in local currencies. When prices rise and the local currency weakens simultaneously, companies can get caught in a pincer movement – double exposure with no room to adjust.
These examples are real, recurring, and relevant, and they illustrate the need for a deliberate, well-informed FX plan.
Key Questions Every CFO Should Be Asking
To build a resilient FX strategy, start with these:
- What currencies are we exposed to – directly and indirectly?
- Are our payment terms introducing timing risk?
- Are we buying or selling in currencies we can influence – or are we purely at the mercy of market movement?
- Do we have visibility into the FX exposures in our supply chain?
- What’s our plan if the rate moves 3%, 5%, or 10% overnight – and how quickly can we act?
If any of those questions are answered with guesswork, assumptions, or silence – that’s your red flag.
Hedging Isn’t Complicated. Ignoring FX Risk Is.
We get it – “hedging” sounds complex. But it doesn’t need to be.
At BLK.FX, we help businesses use practical, easy-to-understand tools like:
- Forward contracts: Lock in today’s rate for future transactions, giving you cost certainty in your forecast.
- Flexible forwards: Protect downside risk while keeping options open – especially useful for businesses with unpredictable payment schedules.
- Layered strategies: Hedge in tranches to manage exposure across multiple timelines and amounts, avoiding the pressure of “perfect timing.”
These tools aren’t about beating the market. They’re about building reliability into your margins, your forecasts, and your commercial strategy.
When done right, FX management stops being a cost-saving exercise and starts becoming a competitive edge.
Final Thoughts: You Can’t Avoid FX Exposure – But You Can Manage It
The risks of importing and exporting aren’t just about bad timing or unlucky rates. They’re about structural vulnerabilities that most businesses carry without realising, especially when foreign exchange exposure is overlooked or unmanaged.
From direct transactions to indirect supplier exposure, every cross-border touchpoint adds a layer of uncertainty. And in today’s market, uncertainty is expensive.
But here’s the upside: FX volatility is one of the few business risks you can actually plan for.
With the right FX strategy, you can:
- Take control of the margin.
- Strengthen your forecasting.
- Free up your team from firefighting unexpected swings – so they can focus on what moves the business forward.
📞 Let’s Talk FX Strategy
At BLK.FX, we work with CFOs, Treasury leads and finance teams to remove the guesswork from currency risk.
Whether you’re importing components, exporting services, or just trying to avoid surprises in next quarter’s numbers – we can help.
