French opportunity as UK departs the EU

As the first fully fledged member state prepares to leave the European Union with the UK’s departure, it is worth exploring what this means for businesses on the other side of the Channel in France.


Like their UK counterparts, capitalising on change without waiting for the political process to complete is vital for French business who, also like their UK counterparts, are taking the initiative to meet this challenge.


An important lens into what business is doing “on the ground” is to examine the current and forecast use of currencies as a share of cross border business. French business estimated change in the context of geopolitical changes and the forecast strengthening or weakening of the Euro is a telling indication of how companies are preparing for the upcoming exit of the UK.


With French business forecasting the EUR to weaken against the GBP across the board we’d be forgiven for assuming that this would increase the use of GBP by exporters in France as their products and services became relatively cheaper for UK importers. What we find, however, is that all segments and all trading profiles in France are forecasting decreased usage of the GBP. Perhaps a reflection of attitudes that cause decisions to be made from the heart in response to Brexit rather than based on commercial outcomes?

This currency research also provides an indication of French business’ trade planning in its search for opportunities and growth.


What is interesting, is that no matter where French business is forecasting the Euro to be against the major trading currencies, both importers and exporters are forecasting in unison either increased or decreased use of the currency in question - the only exception being RMB with importers forecasting an increase as China continues to be a top two import market. Again, this may be intuitively wrong on the traditional assumption that products and services become cheaper or more expensive thus driving increased or decreased demand and possibly can only be put down to local market vagaries.


Also of note (and somewhat inexplicable) is that businesses who both import and export buck the wider trend for growth in use of the USD and Yen and are instead forecasting a downturn in their usage.


As with the UK, change in EUR / GBP in France is being driven by Lower Corporates. French corporates are forecasting a 15 percent drop in usage which, given the UK is a top five export destination, is a significant move.


What’s replacing the Pound among French business is telling. The largest growth in the use of major currencies is by Lower Corporates’ use of USD, up 17 percent and perhaps not so surprising as the US is a top five trading partner for both exports and imports. A very large increase in the use of Other currencies is being driven by Micro businesses and those involved in both import and export activities, up 139 and 295 percent respectively, albeit from a relatively low starting point.

The changing nature of French business’ trade and international payment strategies, as evidenced by East & Partners’ currency research, raises the question as to how financial providers capture the opportunity presenting itself?


Meeting the needs of evolving cross border payment behaviour is an obvious start point but adding value by being destination capable will be a key factor to success. Micro businesses are facing the greater challenge in this respect given the historically low levels of service, high costs etc. that go hand in hand with the smaller end of town and are therefore an opportunity space for providers willing to take a more flexible view of their risk profiles.


It’s easy to forget that Brexit isn’t all about the UK, this is a global opportunity for business and providers of services into and out of both the UK and Europe. Capturing the opportunity will be the challenge.


These insights are drawn from the latest round of the French Business FX Market Analysis report. The twice yearly reporting interviews over 2,100 businesses in France ranging from micro businesses with annual turnovers of €1m-5m, to SMEs €5m-20m and lower corporates €20m-100m. The programme is now entering its seventh year, with twelve rounds produced to date. If you would like more information about this report and how you can benefit from the insights it will provide to this dynamic market please contact

We’d welcome your thoughts on how banks and financial providers can best facilitate French business’ trade growth from a new look Eurozone.