Think foreign exchange is a headache? Think again: Forex can become your ally, turning your international payments into an opportunity! Forex, or the foreign exchange market, is where currencies are traded - euros, dollars, yen, pesos - 24/7, across the globe. With $5.1 trillion traded daily, according to the Bank for International Settlements, it's the vibrant pulse of international trade.

For a start-up French SME exporting cheese to the USA, importing parts from Asia or selling IT services in Australia, Forex is a must. But why do exchange rates seem so intimidating, and how can you approach them without stress?

This article provides a step-by-step guide to understanding currency exchange, securing your cash flow and adopting a sustainable approach - with a touch of sustainability for a positive impact, thanks to Keewe.

Forex, or "Foreign Exchange", is the global market where currencies are traded, such as the euro (EUR) against the US dollar (USD), the Japanese yen (JPY), or the Mexican peso (MXN).Imagine an SME selling IT services to Australia: it receives Australian dollars (AUD) which it must convert into euros to pay its bills. This process takes place on Forex, a gigantic market active 24/7, covering all time zones, from Tokyo to London to New York.

But how does it work? Exchange rates - for example, 1 EUR = 1.05 USD - are constantly changing, influenced by supply and demand, monetary policies (such as an ECB or Fed rate hike), the global economy or geopolitical tensions. If the ECB raises rates, the euro may strengthen, making 1 EUR = 1.08 USD, making your exports to the USA more competitive, but your imports more expensive.

According to the Bank for International Settlements, 5.1 trillion dollars are traded every day, dominated by key currency pairs: EUR/USD (23%), USD/JPY (13%), GBP/USD (11%), according to 2022 statistics. For an SME starting out, these figures can be impressive, but with the right basics, Forex becomes clear and accessible.

Forex isn't just a market for trading currencies - it plays a central role in many areas of business and private life. Here, in a clear and logical sequence, are its main uses, explained simply for you:

• Facilitating international trade: SMEs and SMBs buy or sell foreign currencies to pay their foreign suppliers or receive payments, while optimizing exchange rates.
• Managing currency risk: Currency fluctuations can impact your margins. An SME starting out can monitor the EUR/USD to avoid losses on deferred payment, for example by paying quickly if it anticipates a fall. A medium-sized company can monitor GBP/EUR to limit risks on exports to the UK, even without advanced tools such as contracts (reserved for experts).
• Investing and trading: Investors and traders speculate on currencies to profit from variations, buying USD at 1.05 EUR/USD and selling at 1.10, for example. But beware: 88% of Forex transactions are speculative, according to Carousel, often using complex strategies such as leverage, not suitable for beginners.
• Banking and institutional transactions: Banks convert currencies to finance global operations, manage national reserves or secure payments. For example, a French bank exchanges EUR 1 million into JPY for an international loan, or an ETI uses Forex to stabilize its USD reserves.
• Payments and tourism: Individuals and companies exchange currencies to pay abroad, limit bank charges or optimize transactions. An SME sends an employee to the USA, exchanging 5,000 EUR into USD at 1.05 (5,250 USD), avoiding high fees, while a private individual goes on vacation to Japan and converts 2,000 EUR into JPY at 160 JPY/EUR (320,000 JPY).

These uses show that Forex is everywhere - and vital to your start in international trading, even without expertise.

If you're just starting out internationally, Forex has a direct impact on your finances. A French SME paying USD 10,000 to an American supplier will see its cost vary: €9,524 at 1.05 EUR/USD, €10,000 at 1.00 (a loss of €476), or €9,091 at 1.10 (a gain of €433). These fluctuations, however small, affect your cash flow and your competitiveness.

For an SME exporting machinery to China, a payment of 1 million CNY at 0.13 EUR/CNY (€130,000) could become €135,000 if the yuan rises to 0.135, or €125,000 if the rate falls to 0.125 - a difference of €10,000.

According to Eurostat, 60% of novice European SMEs suffer Forex losses, especially on currencies such as the South African rand (ZAR, volatility 12% in 2023, according toXE.com), or the Mexican peso (MXN, 10% in 2022). Whether you're importing goods, exporting services or receiving payments, Forex is a reality you need to master to succeed.

Forex may seem intimidating to novices, but these challenges are surmountable. Here are the main obstacles:

• Volatility : Rates change rapidly. In 2023, EUR/USD has varied between 1.05 and 1.12, according to Bloomberg, impacting your costs or revenues. An SME paying USD 100,000 at 1.05 (€95,238) could pay €92,593 at 1.08 - or €100,000 at 1.00, losing €4,762.
• Hidden charges: Banks add margins of 2% to 5%, according to the World Bank, on your conversions. For USD 50,000, this can represent €1,000 to €2,500 in unexpected, often hidden, charges.
• Complexity : Managing exotic currencies (e.g. Mexican peso, MXN) or tracking rates requires time and tools, which can be confusing without experience.
• Forgotten ecological impact: Every international payment has a carbon footprint (Scope 3), linked to servers, banking networks and logistics. Beginners are often unaware of this impact, but it's becoming crucial for your CSR image and your environmentally-conscious customers.

These challenges are not insurmountable. With the right advice, you can turn them into an opportunity - and even a lasting act.

Don't panic: Forex is accessible to beginners! Here are some simple steps to get you started:

• Follow rates: Use free tools like XE.com or Bloomberg to monitor EUR/USD, GBP/EUR or ZAR. An SME saved €500 on a USD 10,000 transfer by anticipating a 5% drop in 2024, paying before EUR/USD rose from 1.05 to 1.00.
• Choose reliable partners: Avoid banks with hidden fees. Choose transparent fintechs, like Keewe, for your payments, with clear, competitive rates.
• Avoid delays: Pay quickly to limit the risk of volatility. For example, a 30-day deferred payment on USD 100,000 could cost €4,762 if the EUR/USD moves from 1.05 to 1.00, but only €2,381 if you pay at 1.07.
• Integrate sustainability: Measure the carbon impact of your payments with Green FX for a responsible approach, aligned with your CSR customers. An SME reduced its carbon footprint by 5 tCO2e on €50,000 in 2024, while optimizing its costs.

These basics make Forex an ally, not an enemy. One SME reduced its Forex costs by 15% and improved its green image by following these tips.

At Keewe, we make Forex simple for novices. With over 100 currencies available, competitive rates with no hidden fees, and our human FX desk, ask your questions, get clear answers - real people are with you. Our tools optimize your international payments in real time, so you can manage EUR/USD, ZAR or MXN with confidence.

With Green FX, every transaction becomes a sustainable act: we measure its carbon footprint (Scope 3) and donate 15% of our revenues to finance sustainable projects - for example, 7.5 tCO2e offset on a €50,000 transfer. An SME reduced its Forex costs by 20%, offset 5 tCO2e and simplified its exchanges in 2024 with Keewe, while strengthening its CSR.

For the more advanced, we offer futures contracts (forward contract, forward contract, futures contract, futures contract example, futures contract example) to secure your rates, but start with the basics today!

Forex is no mystery - it's an opportunity for your international payments, exports and imports. By understanding its uses, monitoring its rates, avoiding hidden fees, avoiding delays and integrating sustainability, you secure your cash flow, build a responsible business and gain in competitiveness.

With 60% of novice SMEs affected by Forex losses, act now. Get started with Keewe at www.keewe.eu -simplify your currencies, protect your margins and act for the planet, simply and effectively!