To buy or not to buy my friends – that is the question.
The vast majority of tech is purchased from China and paid for in US$ dollars. As such the strength of the Pound against the Dollar does have a bearing on the costs of these goods.
So what will impact currency rates in the foreseeable future? Whilst there are many reasons here are 3 which have the biggest potential impact on currency markets.
Will there be a Brexit deal?
A UK-EU trade deal would be the ideal scenario for both sides. It will help generate growth in what is a fragile, pandemic-stricken climate. If the UK and EU fail to reach a deal and the UK needs to trade on World Trade Organisation terms, then this will ramp up trade costs, in the form of higher tariffs, quotas and other non-tariff barriers.
Based on how the market has reacted when there are no-deal Brexit fears – the pound falls and when hopes of a deal rise – the pound rises.
After Pfizer and BioNTech announced a Covid-19 vaccine efficacy of 90% closely followed by Moderna with an astonishing 95% efficacy, financial markets including currency markets have significantly improved.
This confidence has been further solidified with AstraZeneca and the University of Oxford vaccine technology showing average efficacy of 70.4%m, but a smaller dosing strategy reaches 90% efficacy. It is also far cheaper and easier to store. Great news in the fight against Covid-19!
However, until vaccines are rolled out to the masses, stringent public health measures to curb the spread of Covid-19 infections continue across many parts of the world. Both the Euro and the British Pound could experience volatile movements due to this.
A new President
With US President Donald Trump finally allowing the transition to the Biden administration to commence, currency markets have relaxed. However, with legal action still threatened by the incumbent president, a potential backlash from hardcore Trump supporters and the continued growth in Covid-19 cases, the US currency market still remains volatile.
So what can buyers do to protect themselves against these volatilities? There are many currency tools and future options on the market that can help to reduce this exposure, but all carry some element of risk.
The alternative is to purchase from UK suppliers that already hold stock in the UK and so no risk of any currency volatility.
USB2U has and continues to invest in holding a significant quantity of promotional tech items and with its in-house print facility, goods can be despatched in as little as 24 hours.
So if you are playing the game of currency poker, UK stockists such as USB2U, can ensure you always have the nuts!Back