Nvidia said it is set to take a $5.5 billion first-quarter charge after the U.S. limited exports of its artificial intelligence (AI) chips to China.
The news, the latest salvo in an escalating trade war between Washington and Beijing, sent the firm’s shares tumbling in premarket trading Wednesday.
The U.S. Commerce Department also imposed export controls on AMD’s sales of its AI chips to China.
Nvidia (NVDA) said it expects to take a $5.5 billion charge in its fiscal 2026 first-quarter results after the U.S. limited exports of its artificial intelligence (AI) chips to China.
The news, the latest salvo in an escalating trade war between Washington and Beijing, sent the firm’s shares tumbling roughly 6% in premarket trading Wednesday.
The company said in a regulatory filing late Tuesday that it was informed by the U.S. government on April 9 that it would be required to have an export license “for the indefinite future” to sell its H20 chips to China. Nvidia said the license requirement is aimed at addressing the risk that the chip would be “used in, or diverted to, a supercomputer in China.” The chip is less powerful than its newer ones and tailored to meet existing export limits for the Chinese market.
Nvidia’s Q1 results, which are expected May 28, are set to include the $5.5 billion charge “associated with H20 products for inventory, purchase commitments, and related reserves,” it said. According to Morningstar Research, “China has shrunk to about 10% of Nvidia’s revenue from 20%, and we now expect it to go to close to zero.”
The New York Times reported that a spokesman for the U.S. Commerce Department said “that the administration was issuing new export licensing requirements for the Nvidia H20; a chip from Advanced Micro Devices, the MI308; and their equivalents.” AMD (AMD) shares also were down about 6% in premarket trading.
CORRECTION-April 16, 2025: This article has been corrected to note the U.S. Commerce Department has also imposed export controls on AMD’s sales of its AI chips in China.
Rexas Finance (RXS) is drawing investor attention as it mirrors Shiba Inu’s early rise but with real-world value. The platform’s asset-backed token model positions RXS as a promising contender for long-term stability and real gains. With over $47 million raised and a Certik audit completed, Rexas Finance offers more than hype—it offers substance.
Rexas Finance continues to gain momentum with a presale that has already reached over 91% completion across twelve stages. The current capital raised stands at more than $47 million, showing strong investor interest and trust. The ongoing token sale aims to reach a $56 million goal, indicating potential market strength. The project has a total supply of one billion RXS tokens, with 42.5% allocated to the presale. An additional 22.5% supports staking incentives, encouraging long-term investor participation in the ecosystem. The remaining supply supports liquidity, partnerships, and ecosystem development, maintaining a structured and balanced token economy. Unlike speculative tokens, Rexas Finance applies strategic allocation to support both short-term liquidity and long-term utility. The treasury holds 10% of tokens for platform expansion, while 5% is reserved for the team and partners. This structure shows a clear plan for sustainable growth and market engagement.
SHIB’s Market Trajectory and Volatility
Shiba Inu gained popularity through community support and speculative growth, leading to sudden price spikes and frequent volatility. While early investors saw high returns, many late entrants faced sharp losses due to market swings. The lack of tangible asset backing made SHIB’s growth heavily reliant on hype cycles. Although Shiba Inu built a strong following, its utility remains limited to meme value and short-term market trends. The token lacks real-world investment channels, making long-term stability difficult to achieve in comparison to asset-backed tokens. Investors are now seeking platforms that combine security with sustainable returns. This is where Rexas Finance stands apart, as it reduces volatility through real-world asset exposure and DeFi integration. Its presale success and strategic development suggest a more reliable growth trajectory than meme-driven tokens like SHIB. The RXS model aligns with evolving investor preferences for value and utility.
Why Rexas Finance Offers a New Investment Opportunity
Rexas Finance allows users to access fractional ownership in high-value assets like real estate, gold, and corporate bonds. These markets traditionally required significant capital and institutional access, but RXS opens them up to everyday investors. The platform improves liquidity and transparency through blockchain tokenization.
In addition, Rexas Finance provides tools like a Token Builder, Launchpad, DEX, and real estate DApp to expand its DeFi reach. These tools support ecosystem development and user empowerment, increasing engagement and long-term participation. The platform’s roadmap signals a move toward full-featured decentralized financial services. Security remains a priority, with Rexas Finance passing a full Certik audit to build trust among retail and institutional investors. This combination of security, utility, and real-world value makes RXS a standout project in the crypto landscape. Investors looking for growth beyond meme coins are shifting their attention to Rexas Finance.
Rexas Finance: A Stronger Alternative in a Changing Market
Rexas Finance is gaining attention as SHIB’s early price action seems to repeat—but now with a more practical investment model. RXS gives investors access to real assets while offering the growth potential of crypto, setting a new benchmark for blockchain investments. As SHIB struggles with utility, RXS surges ahead with real-world impact. With its presale nearing completion and features like staking, token creation, and real estate investment, Rexas continues to expand. The platform supports the mainstream adoption of tokenized assets and appeals to users looking for long-term gains. Its balanced tokenomics and growing ecosystem present a compelling case for adoption. Rexas Finance is not just another crypto—it is a transformative platform that bridges traditional finance and blockchain. As the market matures, investor interest is shifting toward secure and utility-driven projects.
Disclaimer: The views and opinions presented in this article do not necessarily reflect the views of CoinCheckup. The content of this article should not be considered as investment advice. Always do your own research before deciding to buy, sell or transfer any crypto assets. Past returns do not always guarantee future profits.
U.S. consumers are likely to see immediate price increases on items brought in from China at retailers such as Target, Walmart, and Amazon, one trade expert said.
Price increases are likely to match the size of tariffs themselves, at 145%.
Economists said higher prices could represent short-term pain with little chance of long-term gain, as many obstacles prevent the return of Chinese manufacturing to the U.S.
Consumers, businesses, and even the prospects for U.S. manufacturing are all likely to become casualties in the escalating trade war between the U.S. and China, trade experts say.
Economists predicted the trade war between the world’s two largest economies would have serious consequences for American consumers and workers.
The Price of Import Taxes
The tariffs, which started this month, could quickly increase the prices shoppers see at popular online and brick-and-mortar retailers.
“Most of the things you might see on the inside of the store at a Target or a Walmart or on Amazon, I think we would expect significant price increases pretty immediately,” said Christopher Conlon, an associate professor of economics at the Stern School of Business at New York University.
Clothing, toys, and plastic items with small electronics in them (such as vacuums, toasters, and small appliances) will likely be among the first products to see immediate price increases. Conlon estimated about 50% to 60% of Amazon’s offerings would be affected, and many would rise by about the same amount as the tariffs.
Conlon had some advice for consumers that economists don’t usually give: it might make sense to buy certain items before prices go up.
“If you have the cash on hand and you’re really worried about buying some of these things, it might not be the worst idea to stock up on them,” he said, noting that big-ticket items that last a long time, like appliances, would make the most sense to buy now. “The big caveat is, of course, next week, we could be having a completely different conversation about tariffs because this situation is evolving very quickly.”
Will the Cost Be Worth It?
Eventually, manufacturers could adapt to the tariffs by moving production out of China to countries like Vietnam or Mexico, which have lower tariff rates, at least for the time being, Conlon said.
But could all the short-term pain result in long-term gain? The tariffs are meant to restore U.S. manufacturing to its glory days after WWII, when America, not China, was the world’s factory, by encouraging businesses to set up plants in the U.S. rather than abroad.
There are a few obstacles standing in the way of that outcome, said Sina Golara, assistant professor of supply chain and operations management at Georgia State University’s Robinson College of Business.
For one thing, even as high as the tariffs are, it still might be more cost-effective to manufacture many things in China than in the U.S., Golara said. Companies hoping to set up in the U.S. would have to not only build a factory but also replicate the infrastructure and supply networks that have been built up over decades. On top of that, U.S. workers are paid more than their Chinese counterparts, adding to production costs.
“The cost gap is so much that even tariffs being as high as they are today would still not make it expensive enough to be worth moving everything to the United States,” Golara said.
In addition, the tariffs themselves are an obstacle because they make it more expensive for a factory located in the U.S. to import parts and materials from other countries.
What Is The Best Outcome From This Trade War?
Another headwind for the U.S. economy is that China has some leverage to harm American consumers and companies with its own trade policies.
China could cut off imports from U.S. companies and stop exports of certain important minerals used in advanced manufacturing, of which China is the main or only supplier, Conlon said.
“There’s another case where you engage in a war, and then you just dial back half of your tariffs,” Golara said. “In that case, you’re really hurting everyone, except you’re hurting everyone else a little bit more … it’s kind of like a mutual destruction tool.”
The states with the cheapest 30-year mortgage refinance rates Monday were California, New York, Texas, Florida, Utah, Alabama, and Georgia. The seven states registered averages between 6.98% and 7.20%.
Meanwhile, the states with the highest Monday refinance rates were Alaska, West Virginia, South Dakota, Kentucky, South Carolina, Montana, Washington, D.C., and Wyoming. The range of 30-year refi averages for these states was 7.29% to 7.35%.
Mortgage refinance rates vary by the state where they originate. Different lenders operate in different regions, and rates can be influenced by state-level variations in credit score, average loan size, and regulations. Lenders also have varying risk management strategies that influence the rates they offer.
Since rates vary widely across lenders, it’s always smart to shop around for your best mortgage option and compare rates regularly, no matter the type of home loan you seek.
Important
The rates we publish won’t compare directly with teaser rates you see advertised online since those rates are cherry-picked as the most attractive vs. the averages you see here. Teaser rates may involve paying points in advance or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. The rate you ultimately secure will be based on factors like your credit score, income, and more, so it can vary from the averages you see here.
National Mortgage Refinance Rate Averages
Rates for 30-year refinance mortgages dropped 8 basis points Monday to a 7.23% national average—reversing course after surging 40 basis points over the previous week. Friday’s 7.31% reading was the highest average for 30-year refi rates since July 2024.
Last month, in contrast, 30-year refi rates sank to 6.71%, their cheapest average of 2025. And back in September, 30-year rates plunged to a two-year low of 6.01%.
Calculate monthly payments for different loan scenarios with our Mortgage Calculator.
What Causes Mortgage Rates to Rise or Fall?
Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as:
The level and direction of the bond market, especially 10-year Treasury yields
The Federal Reserve’s current monetary policy, especially as it relates to bond buying and funding government-backed mortgages
Competition between mortgage lenders and across loan types
Because any number of these can cause fluctuations simultaneously, it’s generally difficult to attribute any change to any one factor.
Macroeconomic factors kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the pandemic’s economic pressures. This bond-buying policy is a major influencer of mortgage rates.
But starting in November 2021, the Fed began tapering its bond purchases downward, making sizable monthly reductions until reaching net zero in March 2022.
Between that time and July 2023, the Fed aggressively raised the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it doesn’t directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions.
But given the historic speed and magnitude of the Fed’s 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.
The Fed maintained the federal funds rate at its peak level for almost 14 months, beginning in July 2023. But in September, the central bank announced a first rate cut of 0.50 percentage points, and then followed that with quarter-point reductions on November and December.
For its first meeting of the new year, however, the Fed opted to hold rates steady—and it’s possible the central bank may not make another rate cut for months. With a total of eight rate-setting meetings scheduled per year, that means we could see multiple rate-hold announcements in 2025.
Risk-off moves are picking up once again as global equity markets turn lower and the US dollar extends its drop – trading at about the lowest level in three years. President Donald Trump urged China to initiate negotiations to address the escalating trade conflict between the world’s two largest economies. In response, China reportedly instructed airlines to halt further deliveries of Boeing Co. jets, marking its latest retaliatory move against Trump’s decision to impose tariffs of up to 145% on Chinese goods. The Trump administration then imposed new restrictions on Nvidia’s chip exports to China. These developments underscore the deepening standoff between the US and China, with no resolution in sight as both nations continue to raise trade barriers to unprecedented levels.
Market volatility has cooled off this week, but this does not signal that the critical issues facing investors have been resolved. Instead, trade uncertainty has surged to previously unimaginable heights, surpassing levels seen before “liberation day”. Overall US policy uncertainty also remains elevated and the adage that markets despise uncertainty remains frustratingly accurate – the current climate exemplifies this sentiment to an extreme degree.
Data from the US yesterday revealed companies’ expectations for business activity six months ahead plunged in April to its lowest since 2001, according to the Empire State manufacturing survey, while price increases — both actual and expected — became more widespread.
US assets, including the dollar, continue to carry a notable risk premium amid growing investor caution. The traditional correlation between the dollar and Treasury yields has reached its weakest point in three years, reflecting heightened doubts about the safety of US assets during periods of economic stress. The dollar’s rapid decline has been driven by capital flight from US markets, as fears grow that the Trump administration’s trade war could tip the economy into a recession.
Yields on US long-term debt remain near 17-month highs. Typically, higher bond yields bolster the dollar; however, the dynamics have diverged this time. Scepticism about the dollar’s haven appeal and its central role in the global financial system is causing this decoupling.
Pacey euro appreciation to force ECB’s hand
George Vessey – Lead FX & Macro Strategist
The euro resumed its rally against the US dollar this morning, though it remains in overbought territory based on the daily relative strength index. While the broader outlook favors the euro in the medium term as funds shift away from the dollar, the European Central Bank (ECB) may act to slow its appreciation with a rate cut expected tomorrow.
EUR/USD has surged approximately 5% this month, reaching fresh three-year highs, while EUR/CNY has climbed 6% since the March ECB meeting, hitting a decade high. The depreciation of the Chinese yuan relative to the euro raises questions about its potential to further support China’s exports to the EU, especially as US-China trade is set to decline sharply due to tariffs. President Trump’s ongoing tariff negotiations aim to pressure US trading partners to limit their dealings with China, a move Europe might consider given its growing trade deficit with China since 2020.
The ECB is widely anticipated to cut rates by 25 basis points on 17 April, citing intensified growth risks linked to US tariffs. While rates may be nearing neutral, further tariff-driven cuts remain possible. That said, the correlation between FX and rate differentials has evaporated since “liberation day” and the ongoing rotation from US to European assets could mean that EUR/USD will remains supported around $1.13 even if the ECB leans dovish.
On the macroeconomic front, investor confidence in Germany’s economy has plummeted amid the escalating trade war. The ZEW institute’s expectations index fell sharply to -14 in April from 51.6 the previous month, highlighting the growing uncertainty surrounding global trade dynamics.
Pound mixed after slower inflation
George Vessey – Lead FX & Macro Strategist
The pound remains strong versus the US dollar but under pressure against the euro after lower-than-expected UK inflation data provided temporary relief for the Bank of England (BoE), which is preparing for the economic fallout of Trump’s tariffs.
Headline inflation came in at 2.6%, while services inflation – a key indicator for BoE policymakers – declined more than anticipated, falling to 4.7% in March from 5% in February. However the dip in inflation may only be short-lived. Rising household bills and higher business costs are expected to drive inflation higher from April onwards. Thus, the BoE faces a challenging task as it balances a weakening jobs market against the likelihood of rising inflation later this year, partially fueled by escalating living costs.
The pound has gained ground versus the dollar, eying $1.33, but remains on the back foot against the euro. As a reserve currency, sterling is part of the broader devaluation of the dollar. However, the euro benefits from higher liquidity and significant repatriation of financial assets into the Eurozone, supported by its large trade surplus with the US.
Overall, sterling’s 2.8% monthly gain against the dollar reflects dollar weakness rather than inherent pound strength. The pound has lost ground against six of its G10 peers, gaining only against three. A genuine sterling rally would show broader strength, particularly against the euro. Instead, sterling has underperformed the euro, amidst elevated volatility, mirroring its behaviour during the pandemic’s initial wave. As volatility eases, the pound could recover ground versus the common currency, supported by the UK’s relative resilience to tariffs and stabilized demand-side data.
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
Oppenheimer reiterated its Outperform rating for Netflix, as well as its price target of $1,150––one of the highest on Wall Street.
Analysts at Oppenheimer said in a report that the streamer will not feel the impact of tariffs and little impact from an unstable economy, justifying their bullish rating.
Bank of America analysts, meanwhile, have reiterated their own bullish rating and price target ahead of this week’s expected earnings results.
Netflix can survive an uncertain economic environment, according to Oppenheimer’s bullish analysts.
The bank on Monday reiterated its Outperform rating for Netflix (NLFX) shares. The stock, aided by a news report discussing the streaming giant’s plans to continue growing, has jumped today. Bank of America analysts, meanwhile, reiterated their own bullish rating and target.
Oppenheimer analysts ahead of Netflix’s next round of quarterly results, due later this week, said the company should be insulated from the effects of tariffs and economic unease. Consumers tend to value television more highly during recessions when they spend more time at home, the analysts wrote. Meanwhile, Oppenheimer wrote, Netflix’s latest round of price increases has already arrived, meaning it has “been digested” by consumers.
The investment bank’s $1,150 price target is among the highest on Wall Street, above the mean target of $1,097, according to Visible Alpha. Most of the analysts tracked by Visible Alpha have “buy” or equivalent ratings on the shares, which were recently up about 6% to roughly $988.
Bank of America reiterated a “buy” rating and $1,175 target, citing “ample runway for continued growth driven by further subscriber additions along with more monetization opportunities (both via pricing and advertising) and a significant ramp in operating income.”
Netflix is slated to report its 2025 first quarter earnings on Thursday.
Shares of major U.S. banks surged after Bank of America (BAC) and Citigroup (C) became the latest lenders to report better-than-expected first-quarter earnings on the back of a stock-trading boom.
Bank of America shares were up 4.5% Tuesday afternoon, while those of Citi were 3.8% higher. Both banks were among the top gainers on the S&P 500. The benchmark index’s financial services sector was its best performer in recent trading.
The KBW Nasdaq Bank Index (BKX) was more than 2% higher in recent trading. Morgan Stanley (MS) and Goldman Sachs (GS) were both up around 2%. Shares of JPMorgan Chase (JPM), one of the world’s largest banks, were little changed.
Comments from Bank of America CEO Brian Moynihan on the company’s earnings call noting that the U.S. economy is on a solid footing despite the turmoil around President Donald Trump’s tariffs also lifted investor sentiment. Concerns of a looming recession and a spike in inflation have mounted in recent weeks since Trump began launching tariffs on U.S. trading partners.
Citigroup CEO Jane Fraser said Tuesday that she believed the U.S. will remain the “world’s leading economy.” She also said she was bullish about the prospects for the U.S. dollar, which is on track to have its worst two-month stretch since 2002.
“When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world’s leading economy, and the dollar will remain the reserve currency,” Fraser said.
After emerging under the hashtag #NoBuy on TikTok in 2024, a growing counter-movement to relentless consumerism has formed under the banner “No-Buy 2025.” Taking off from a mix of economic pessimism, environmental concerns, and academic insights on overconsumption, this movement is challenging the culture of perpetual buying and spending.
David Tenerelli, a certified financial planner at Values Added Financial Planning, told Investopedia that most people are facing “systemic headwinds” financially because of major spikes in college and housing costs, inflation more generally, and the significant economic shocks of the past two decades.
Within this context, it’s no surprise that what began as a minimalism movement among Gen-Z on social media like TikTok and Reddit Inc. (RDDT) has evolved into a broader social phenomenon, with participants pledging to limit their spending to only essential items throughout the year while avoiding discretionary purchases entirely.
Key Takeaways
“No Buy 2025” (with some practicing “Low Buy 2025”) is a call to pause unnecessary spending amid growing economic pressure and environmental concerns.
While the goals behind the movement can be both practical and noble, there could be unintended consequences for some, including eventual splurging.
What’s Driving the ‘No-Buy’ Pledges
The No-Buy 2025 challenge has resonated particularly with younger generations, given their economic anxiety. Consumer confidence is much lower than in the pre-pandemic period. Then there’s the “proliferation of social media and the resulting widespread status orientation, overconsumption, and the mental health challenges” that can result, Tenerelli said.
The movement offers a shift away from this overconsumption, with some participants mentioning climate change and global inequities as among the reasons for taking the pledge. “No-Buy” participants say they’ve also discovered the fun of free activities like visiting parks and libraries, as well as using items that fell by the wayside when they were constantly shopping.
Fast Fact
Many participants report that the challenge isn’t about saving for a specific goal but making sure they can afford basic necessities like groceries and household items in an increasingly expensive economy.
10 Tips for ‘No-Buy 2025’
Tenerelli suggested a good way to get started is to identify and define your values, all to better align your spending with them. You can also help yourself succeed by checking your spending and making it as concrete as possible.
“Where are you spending your money—really, each dollar? And then start to translate your purchases into actual hours worked, and determine whether each purchase is worth it in terms of fulfillment, nourishment, and value,” he said.
Here are ways you might find more success once you’ve decided to take the pledge:
Define clear, personalized rules: Decide which categories are off-limits (clothing, beauty products, home decor) and which are allowed.
Create a “why” document: Document the values or motivations behind taking the pledge and hold yourself accountable. Review these when temptation strikes.
Find an accountability partner: Connect with others attempting the challenge or join online communities like r/nobuy (67.5K+ members) to get help with your struggles and share your victories.
Track your progress: A calendar with stickers, a spreadsheet that calculates savings, or a dedicated journal to document your progress will all do.
Delete shopping apps and unsubscribe from retail emails: Get rid of the spending triggers from your digital environment.
“Shop your stash”: Before you buy something, inventory what you own—do you need it?
Use a waiting period: For any non-essential purchase, add it to a list with the date. Revisit it after 30 days and see if you still want it.
Replace shopping with free activities: Develop hobbies that don’t require spending, like hiking, reading library books, or “shopping” your own closet for new outfit combinations.
Redirect savings immediately: Move money you would have spent into a separate high-yield savings account, CD, or investment portfolio to prevent it from being spent too easily.
Practice mindful consumption: When you need to buy something, do your research, buy quality items that last, and ensure they align with your values and long-term needs.
Wallets Closed, Eyes Open: Potential Drawbacks
The No-Buy 2025 movement could have drawbacks, both personally and economically. Overly restrictive spending rules might backfire with eventual “spending binges” that exceed what would have been spent otherwise. An all-or-nothing approach can create unhealthy relationships with money, replacing overconsumption with obsessive austerity.
Some people may feel socially isolated when they can’t join friends and family for activities that involve spending, which can be a problem for important relationships. Some participants could develop anxiety around any spending, even on necessities, making a more balanced approach of mindful consumption potentially more sustainable for many.
Lastly, there are the broader economic effects: Consumer spending accounts for nearly 70% of U.S. GDP, and widespread adoption of no-buy principles would affect employment in the retail and service sectors and tax revenues for local and state governments. Small businesses, which often operate on thin margins and depend on steady customers, may be particularly vulnerable.
The Bottom Line
“No Buy 2025” is more than just a call for cutting one’s spending—it is a reflective campaign urging consumers to consider the long-term implications of their buying habits on the environment, social equity, and their financial stability. While there are potential drawbacks, getting “on track for a more sustainable relationship with money,” Tenerelli said, can help you see it’s not an end in itself, but a “tool for achieving a deeper life satisfaction.”
As the complexities of international trade and the global supply chain increase, manufacturers must navigate a maze of geopolitical disruptions, regulatory challenges, currency fluctuations and rising costs.
A 2024 Customs Support survey of 33 leading logistics service providers (LSP) and goods owners (GO) found that 51% of businesses have been affected by global shocks such as the Suez Canal blockage and the war in Ukraine.
Additionally, 42% of companies have had to address challenges arising from sanctions against Russia, including increased compliance risks and higher costs when working with international suppliers. Nearly half (45%) of companies surveyed needed specialized expertise to help ensure compliance with local and international customs regulations and deal with stricter environmental regulations.
Cross-border payments and manufacturing
Cross-border payments are financial transactions that occur between parties located in different countries. These transactions involve the transfer of funds or assets from one country to another and can be initiated by individuals or businesses.
For manufacturers, cross-border payments are a crucial aspect of international trade, enabling them to import raw materials and export finished goods. Efficient cross-border payments ensure that manufacturers maintain smooth operations, manage their supply chains effectively and fulfill orders from customers around the world.
Key cross-border payments challenges for the manufacturing sector
With ever-changing regulations and ongoing trade disruptions, manufacturing businesses need efficient, secure and cost-effective payment solutions to ensure smooth operations. Finding a reliable partner to streamline cross-border payments is essential.
One of the most significant issues is foreign exchange (FX) volatility and currency risk. Adverse movements in the relative valuation of money can erode growth plans or increase costs unexpectedly. Delays in processing payments also can negatively impact production schedules, customer satisfaction and overall operational efficiency. Not to mention businesses must also consider hidden transactions, exchange and processing fees.
Careful planning and verification of details before sending payments are crucial to ensure accuracy and efficiency, especially in the face of FX volatility and currency risk.
Plus, regulations are constantly changing, forcing businesses to stay ahead of the curve to avoid fines or penalties due to noncompliance. Without a streamlined process to coordinate differing methods and suppliers, manufacturers can face costly inefficiencies and errors.
Making cross-border payments work for manufacturers
Global payment solutions, offer by providers such as Convera, offer risk management tools that allow businesses to lock in exchange rates and protect themselves from unexpected fluctuations*. These tools, including forward contracts and FX options, can help businesses mitigate risk and manage costs in a volatile global market.
Manufacturers mitigating risk with Convera: Melecs and Mecatherm
Melecs is an international leader in automotive electronics, that turned to tailored FX risk management strategies developed in collaboration with Convera to combat the impact of currency fluctuations on its global operations.
“Convera has helped us develop a much more strategic and proactive approach to currency hedging, which has ultimately helped us reduce our FX risk and consequently protect our margins,” says Ernst Mayrhofer, former CFO and co-owner of Melecs.
With Convera, Melecs reduced the FX fluctuation range in its balance sheet from approximately 5% of the currency requirement to around 1-2%.
Similarly, Mechatherm, a global manufacturer of industrial baking equipment, utilized Convera’s FX hedging expertise to bolster its export-centered business.
“Our business growth was very restricted by our bank’s policies on currency transactions, and I also can’t believe how much time I used to spend online watching currency movements to safeguard our profit margins. Having a currency specialist partner has made life so much easier,” says Alan Burrows, Managing Director of Mechatherm.
Leveraging Convera’s support, Mechatherm gained the ability to hedge much larger amounts, without depositing funds in a security account, making their cashflow much more fluid.
Beyond tailor-made FX risk strategies
Convera can boost manufacturers’ efficiency in other ways too. Another essential factor when managing international payments is speed and reliability. Convera can process payments quickly and ensure timely transfers to maintain operational efficiency while reducing the risk of supply chain delays caused by slow payments.
Moreover, specialists like Convera can empower businesses to make local currency payments. This delivers savings on transaction fees and means you know the true cost of your payment from the outset – no surprise exchange rates. Local currency payments also benefit the recipient as they avoid conversion fees and the risk of exchange rate fluctuations. Some suppliers may be willing to lower their invoice if a business offers to pay in local currency.
When evaluating payment providers, finding one that offers clear, upfront pricing, without hidden fees, is crucial. Transparent partners like Convera reveal the true cost of cross-border transactions, optimizing payment strategies.
Local and international regulatory compliance is another key concern. Manufacturers should look for a cross-border payment provider with extensive regulatory and compliance expertise. Convera offers built-in compliance checks and risk monitoring to help businesses stay on top of the latest rules and sanctions.
For businesses managing payments with multiple suppliers across different countries and currencies, a centralized payment platform can greatly simplify the process. Convera offers streamlined integration with accounting systems and enterprise resource planning (ERP) software to manage payment flows in over 140 currencies, providing real-time flexibility while reducing the administrative burden.
How cross-border payments can enhance manufacturing for years to come
The digitalization of cross-border payments is transforming how businesses — including manufacturing companies — make international transactions. New technologies, such as blockchain and artificial intelligence (AI), are being applied to cross-border payments to make them faster, cheaper and more secure.
For example, some payment processors are using blockchain to enable real-time cross-border payments, while others are using AI todetect and prevent fraud. By embracing these innovations, manufacturers can streamline their payment processes, reduce costs and enhance the overall security of their international transactions.
Innovations in blockchain networks, such as real-time payment rails and distributed ledger technology, are poised to transform the cross-border payments landscape. These advances will allow manufacturers to access working capital more quickly and maintain transparent, immutable ledgers that enhance security and improve the efficiency of cross-border payments.
Multi-currency digital wallets are another promising development as they allow businesses to hold, send and receive payments in multiple currencies, often at more favorable exchange rates.
The integration of AI and machine learning into payment solutions is also on the horizon, promising more security and efficiency with optimized payment routing, fraud detection and real-time risk management.
As emerging markets continue to grow, fintech companies are increasingly focused on offering low-cost, immediate payment solutions that facilitate international trade and promote financial inclusion. Manufacturers looking to expand into new regions will benefit from such innovations, allowing them to access previously untapped markets and strengthen their global reach.
Overcoming manufacturing B2B payment challenges with Convera
By partnering with the right provider, such as Convera, manufacturers can meet the multifaceted challenges of an evolving financial world and ensure that their international operations run smoothly, securely and cost-effectively.
Convera provides automated and comprehensive tools to streamline payments, limit risks and help manage fluctuations in volatile currency markets across 200 countries and territories. From developing a powerful FX hedging strategy to lowering costs, entering new markets and more, contact us to discover how Convera can help your manufacturing business.
Want more insights on the topics shaping the future of cross-border payments? Tune in toConverge, with new episodes every Wednesday.
Bank of America downgraded PepsiCo shares from “buy” to “neutral” and cut its target price for the beverage and snack giant by 16% on Tuesday.
Pepsi’s snack business, Frito-Lay, is selling fewer snacks due, in part, to recent price increases, analysts said.
Beverage sales have also been slow because the company’s drink portfolio is too narrow and hasn’t adapted to changing tastes, Bank of America said.
One of PepsiCo’s (PEP) bigger believers has “blinked,” downgrading the soda-and-snack maker’s shares.
Bank of America’s research team could no longer find reasons to support its “buy” rating, analysts wrote in a research note Tuesday. They slashed their price target from $185 to $155, citing market share losses in the company’s North American drink business and snack unit, Frito-Lay; the old target was one of the highest tracked by Visible Alpha.
“After having been asked repeatedly by investors since the beginning of the year ‘why are you still a buy on [Pepsi]?’ we have run out of answers and are downgrading to Neutral,” the note said. The team’s new price target is about 6% above where shares closed Monday, but 4% below the mean as tracked by VisibleAlpha.
Pepsi shares slipped 3.5% Tuesday to around $143, putting them down about 15% over the past 12 months.
Frito-Lay raised prices on products, which include Lay’s, Doritos and Cheetos, beyond wage growth, leading to fewer sales by volume, Bank of America said. Snack sales have slowed as working-class consumers cut back on spending at convenience stores and gas stations, the note said.
Pepsi’s drink list, which includes Pepsi, Mountain Dew and Gatorade, hasn’t adapted with changing tastes, the note said. The company hasn’t made a “serious entry” in the flavored carbonated soft drink and energy drink categories or gained traction in the low-sugar space, the analysts said. (Pepsi recently announced plans to buy the probiotic soda brand, Poppi, which has less sugar than traditional sodas.)
“These are large and powerful brand franchises which are ultimately ‘turnable’; doing so under current market conditions however will be a steep climb,” the note said.
