According to a new report from currency specialists moneycorp, the manufacturing industry is heavily exposed to the current volatility of currency costs.

For exporters, the weakness of the pound since the EU Referendum has provided a welcome boost to the attractiveness of UK-manufactured products for overseas buyers. However, it also carries some risk and more fluctuations in currency values are expected as the UK’s future relationship with the EU continues to unfold.

For importers, higher currency costs combined with rising inflation at home are resulting in squeezed margins. The situation is also compounded by the US-China trade war and a general downturn in global trade, which has had repercussions around the world.

To help manage the cost of international transfers and the risk of currency exposure, the report recommends manufacturers follow three key steps:

Understand the nature of your currency exposure

Look at your balance sheet and consider what fraction of overall incoming and outgoing funds is held in currency. A company with higher currency exposure bears more risk from currency fluctuations. Consideration should be made to where markets may be growing or shrinking and where future opportunities lie.