US election delays creating hidden costs for businesses

As the US election result remains uncertain, there are risks of volatility in the forex market which will create hidden costs for businesses’ international payments.

Global markets continue to feel more comfortable about the likely outcome of the US election and so equities press ahead once again.

It’s an interesting change of fortunes with investors feeling nervous only a week ago,” says Russ Mould, investment director at AJ Bell.

“As it currently stands, the FTSE 100 is on track to end the week nearly 6% ahead and the S&P 500 has already rallied 7% in the first four days of the week.”

As the US election result remains uncertain, there are risks of volatility in the forex market which will create hidden costs for businesses’ international payments.

Entrepreneur, Pierre-Antoine Dusoulier, Founder and CEO of iBanFirst, has a clever solution. With the company’s cross-border payment solution, businesses can reduce the hidden costs of international payments.

Dusoulier, Founder and CEO, iBanFirst said, “As the prospect of a contested US election is becoming increasingly likely, the outcome of the election may be unknown for days or even weeks. Combined with the continued impact of COVID-19, economic and market confidence is quickly deteriorating. While emerging currencies are falling quite sharply, there are risks of high volatility in the GBP/USD exchange rate which will cause cost implications for businesses’ international payments.”

“With Trump’s post-election legal confrontation potentially on the horizon, volatility in the forex market could be drawn out. A cross-border payment solution can support businesses during these uncertain times by reducing the hidden costs of fluctuating exchange rates. An FX platform can offer businesses transparent spot rates, enabling them to identify the best time to convert their international currencies at a competitive rate.

“Alternatively, businesses can hedge their transfers against currency risk and convert their international payments at an agreed rate for a later date. As vote counting is currently delayed, we believe that the Japanese yen remains the best option for businesses to hedge their transfers against currency risk.”