The Western Union Business Solutions Learning Center is a blog provided for general informational purposes only and should not be construed as legal, financial, tax  or accounting advice. Consult your own independent advisors regarding your particular needs and circumstances.


Q&A: Learn About Foreign Exchange Fluctuation Risks

As a purveyor of gourmet fruit, Andy LaPointe knows what it’s like to be at the mercy of external forces. The possibility of downpours, drought and extreme temperatures means there’s no certainty around how a growing season will unfold.

And for LaPointe, expecting the unexpected isn’t limited to the weather. When his business entered the global arena, he quickly realized the currency markets could be just as fickle as Mother Nature. Fortunately, LaPointe and his wife, Jennifer, have learned how to prepare for the unexpected when operating an international business.

Mrs. LaPointe started Traverse Bay Farms/Fruit Advantage in Bellaire, Mich., 12 years ago as a way to encourage her family to eat healthier. Today, the family business does more than half a million annually, employs three people and works with several independent contractors and freelancers.

We are beholden to the marketplace. If I have fresh cherries or blueberries, no matter what, we’ve got to sell them.

The LaPointes’ business specializes in promoting healthy living and selling super fruit products that include blueberries, cherries and pomegranates. They sell products — like award-winning fruit salsas and fruit-based dietary supplements — in the U.S., the U.K., Japan, China, Australia and New Zealand. “They love cherries in China, and blueberries in the U.K., because it’s a cousin of the elderberry,” Mr. LaPointe says, “and New Zealand and Australia don’t grow the broad range of fruits as the United States.”

Initially, the company focused solely on domestic sales. But three years into Traverse Bay Farms, they went global in order to diversify revenue, make bigger deals and facilitate global distribution. To figure out which countries to target as an exporter, they worked with the U.S. Export Assistance Center in Michigan. They assisted with training to expand internationally.

Here are some of the lessons Mr. LaPointe says he’s learned as an international business owner and exporter over the past few years.

Currency Converter
convert to

What is an important lesson you initially learned about the foreign exchange market?

LaPointe: You’re not going to be able to do this all yourself. Most microbusiness owners are control-driven individuals, or we wouldn’t be in business for ourselves. But when it comes to currency and foreign exchange, you need to bring in experts. It doesn’t make sense to pretend you’re an expert, because you’re not on the floor calling the shots, or brokering the exchange rate with someone in Hong Kong or Singapore.

What is unique to your business when it comes to the foreign exchange market?

LaPointe:  Unfortunately, we are beholden to the marketplace. If I have fresh cherries or blueberries, no matter what, we’ve got to sell them. So, we can’t try to wait for the best deal. It’s the professional’s job to get the deal they can at any given moment, and sometimes you have to take the deal.

Having a perishable product means a company doesn’t have much time to time the market. If they have to use the spot market to make the deal, they may get a better exchange or worse exchange, depending on the market. You need to manage your exchange better when dealing with perishable products.

What is the biggest lesson you’ve learned about minimizing the impact of foreign currency fluctuation risks?

LaPointe:  Don’t try to squeeze out an extra eighth of a point or quarter of a point, because you may lose the whole deal and have to take the current market, which may have moved against you. It’s more important to determine your profit margin, give yourself a threshold of plus 1 percent or minus 1 percent, and then make the deal in case it fluctuates. Usually, we work with a tight percent margin, and if it is within that range, we make the deal, but only if we can absorb market movement.  

What other experiences can you share with family business owners about fluctuation risks in the market?

LaPointe:  Any time there is political risk, there is more currency risk. That’s why the U.S. is stable — because of our political system. Also, it’s good to start domestically, and then jump into the international market to do bigger deals. It allowed us to build and grow our business much faster than if we had immediately started exporting internationally. We have the domestic sales to provide consistent sales, and international for exponential sales and growth opportunity.

What is the value of having a trusted foreign exchange specialist with a wide range of currencies?

LaPointe: Unlike 10 years ago, online currency exchange services have evolved and grown tremendously. They now offer the services a bank does in addition to trusted foreign exchange specialists, education and more. This makes all the difference to small business owners dealing internationally. This means a company like Western Union is a very valuable strategic partner to a small business. They are driven to not only provide the best exchange, but also the relationship to fully understand the requirements of any business.

Live Cross Rates

USD 69.3440 1.3139 0.7857 53.2670 1.0000 0.8780
CAD 52.7470 1.0000 0.5978 40.5230 0.7604 0.6680
AUD 50.4280 0.9555 0.5715 38.7410 0.7268 0.6386
EUR 78.9250 1.4956 0.8945 60.6340 1.1377 1.0000
GBP 88.1960 1.6713 1.0000 67.7560 1.2713 1.1169

Example: 1USD = xx INR

Set a Rate Alert

Have an ideal rate in mind? Set up a Market Alert, and we’ll email you if your rate becomes available.

Set Rate Alert