If 2026 delivers even half the volatility of recent years, CFOs can’t afford to walk into it with last year’s FX assumptions.
Yes, interest rates may be softening, but as we’ve learned, that doesn’t mean stability.
From global elections to shifting trade dynamics and renewed geopolitical friction, we’re heading into a year where currency markets will be shaped by more than just central banks.
It’s an environment that demands a deliberate FX outlook – not just a wait-and-see approach.
And while you can’t predict every move, you can absolutely prepare for the ones that matter.
At BLK.FX, we’re working with clients to pressure-test their exposure against plausible, commercially meaningful FX scenarios. This isn’t theory – it’s about stress testing your P&L, your planning model, and your confidence at the board table.
Depending on your profile and exposures, here are five potential scenarios CFOs should be modelling now – the foundation of any strong FX outlook for 2026.
Scenario 1: The Dollar Dips – Fast
Let’s say the Federal Reserve pivots quicker than expected in early 2026, cutting rates while other central banks hold. The dollar weakens significantly, and for once, not because of panic but because the US is simply ahead of the easing cycle.
For businesses with USD costs – suppliers, inputs, marketing spend – this could feel like a win. But only if you’re positioned to act before that window closes.
What to pressure test:
How much of your USD exposure could be locked in at favourable rates?
If the dollar loses 5% over the quarter, will that flow through to your margin – or will you watch it drift by?
Boardroom question:
“If the dollar drops, can we move quickly enough to benefit – or are we just hoping the market stays kind?”
BLK.FX perspective:
Most companies hedge to avoid losses. The smart ones also hedge to lock in an advantage.
Scenario 2: EUR in the Crosshairs
With several European elections scheduled for 2026 and ongoing fiscal tensions in key EU economies, the euro could face pressure as political risks rise.
For UK businesses billing in EUR or managing EUR-denominated revenue, volatility here is more than a headline – it’s a hit to reported income, pricing, and forecasting accuracy.
What to pressure test:
How does a 3-5% swing in EUR/USD or EUR/GBP affect top-line reporting? Can long-term contracts absorb the noise, or are they now margin liabilities?
Boardroom question:
“What does a weaker euro do to our revenue recognition, and do we have a plan if our customers delay or renegotiate?”
BLK.FX perspective:
Volatility is rarely the issue; unpriced volatility is.
Scenario 3: Sterling Takes a Hit Post Local-Elections
UK fiscal credibility is back in the spotlight, with local elections in 2026, and markets watching how the government balances fiscal promises with economic delivery. Any wobble in policy, credibility or poor showing in the local elections could put pressure back on the pound.
If GBP weakens sharply, import-heavy businesses could find themselves on the wrong end of a double-digit cost increase.
If you’ve got exposure to USD or EUR through suppliers, and your pricing model is fixed in GBP, this isn’t just a risk – it’s a margin event waiting to happen.
What to pressure test:
What happens to your cost base if GBP drops 6% overnight? How long would it take to reprice, and would customers accept it?
Boardroom question:
“Are we structured to absorb a weaker pound or are we crossing our fingers and relying on supplier goodwill?”
BLK.FX perspective:
If you don’t price FX into your planning, the market will price it into your results.
Scenario 4: Commodities Push Currencies Around
Commodity prices – especially oil, metals, and agricultural inputs – are set to remain volatile in 2026. And when they move, so do commodity-linked currencies like the AUD, CAD, NOK and ZAR.
This can quietly impact businesses that aren’t trading directly in those currencies but are sourcing from markets that are.
If your suppliers are exposed to input price swings and local currency moves, that FX risk could land on your desk – without warning.
What to pressure test:
How much of your supply chain sits in commodity-sensitive economies? If their currencies spike 4-6% off the back of raw material moves, are you contractually protected or commercially exposed?
Boardroom question:
“Have we mapped FX risk across the full chain, or are we assuming our suppliers have it under control?”
BLK.FX perspective:
Your FX exposure isn’t just what you pay in foreign currency – it’s what your suppliers can’t control either.
Scenario 5: Safe Havens Surge on Geopolitical Risk
Escalating conflict in the Middle East, rising tension in Taiwan or unexpected fallout from global elections. Any of these could trigger a flight to safe-haven currencies like the USD, CHF, or JPY – pushing them up fast and hard.
If your business holds foreign currency debt, sits on USD-linked liabilities, or is cash-heavy in the wrong places, a 3-5% move can impact liquidity, borrowing costs and earnings in ways the average forecast won’t catch.
What to pressure test:
How would a sharp USD surge affect your P&L, your credit facilities, or your internal funding model? Could you service your obligations cleanly, or would cash need to be repositioned?
Boardroom question:
“How exposed are we to a rapid move in a safe-haven currency – and is that risk intentional?”
BLK.FX perspective:
Safe-haven flows can feel like a market flight – but for unprepared businesses, they land like a cost shock.
How to Turn FX Scenarios Into Actionable Planning
Scenario testing doesn’t need to be complicated, but it does need to be commercial.
This isn’t about running complex models with 20 variables. It’s about creating clear “what if” pathways through your most FX-sensitive assumptions.
Start with three areas:
- Revenue sensitivity: What would a 3-5% currency swing do to recognised revenue from foreign customers?
- Cost exposure: How much of your input cost base is directly or indirectly linked to FX, and how fast do those costs move?
- Liquidity risk: If your cash or debt is denominated in foreign currency, could a sudden move in currency rates hit your interest cover or cash runway?
From there, build tiered scenarios – mild, moderate, severe – and plug them into planning conversations. If your current forecasting model assumes a flat currency profile, that’s your red flag.
You don’t need to forecast every currency move. You just need to know what you’ll do when one hits.
Why Scenario Testing Matters More Than Forecasts
Let’s be clear: this isn’t about predicting what happens next.
It’s about being prepared for the things that actually matter to your business.
Forecasting is useful, but it can’t replace stress-testing your revenue, costs, and cash positions across multiple FX conditions. That’s the difference between a forecast and a functional FX outlook.
The value is in knowing where you’re vulnerable, where you’re already protected, and where quick action could strengthen your hand.
At BLK.FX, we help CFOs and finance leads pressure-test their exposure in commercial terms – turning market unknowns into decision-ready insight.
Final Thoughts: Build Scenarios Before They Build You
If 2026 throws even a fraction of the surprises we’ve seen in the last few years, your FX strategy needs to be sharper, faster and more scenario-ready than ever.
Scenario testing isn’t just good governance, it’s smart finance, and it sends a strong message:
“We don’t guess. We model. And we’re ready.”
📞 Ready to Pressure-Test Your FX Exposure for 2026?
We work with CFOs and finance teams to simulate, quantify and manage currency risk before it becomes a surprise.
Let’s run the numbers that matter.
