We in the FX trading world sometimes forget that moving FX rates affect people and businesses in the real world.
And for many this weekend, it doesn’t get more real than paying more for Valentine’s Day flowers.
Valentine’s Day romantics face paying more for a bunch of roses thanks to adverse foreign exchange rates which have driven up the cost of importing flowers to the UK from European growers.
Research by corporate forex broker Foenix Partners shows that imports of roses will be around 6% more expensive now than they were last year due to the GBPEUR rate slipping by that amount from last February to this.
The pound’s weak performance this year means since December, when flower importers typically finalise order in preparation for the Valentine’s, there have been 9% moves – again making imports more expensive.
Given that many of the UK’s most famous flower markets, such as Covent Garden, import the majority of their roses from Holland, this means there will be particularly high import costs. This is also the case for many online flower retailers.
Richard de Meo, founder and Managing Director of City-based Foenix Partners explains,
Roses are the key theme of Valentine’s Day but there will be no love from flower retailers for the performance of sterling, which has not been kind since last February.
GBPEUR was around 1.3500 last Valentine’s Day versus today’s level of 1.2700, making it 6% lower.
However, the 60-day order cycle means many florists will have been calculating their costs based off the assumed rates available at Christmas. December had a significantly more favourable rate of around 1.4200.
The actual levels now that payment is due are 1.2700, which is 9% lower and a cost that will be passed back to the customer, making Valentine’s even more expensive than it is already.