In the latest episode of “Talking Trade,” Rohini Potluri of U.S. Bank stresses the importance of effective planning for both importers and exporters amid currency volatility.
“Rather than trying to predict exactly where currencies are going, I think the bigger opportunity is preparedness,” she said, adding “currency markets can move quickly … companies that understand their exposures and have a disciplined approach to managing risk are often in a stronger position regardless of the market direction.”
Potluri, the bank’s vice president of foreign exchange, works with business customers across the Midwest who sell products globally. She helps them navigate international currency fluctuations and other changes.
“If a company agrees today to pay a supplier in Europe six months from now, the exchange rate might be very different when that payment comes due,” she said. “And my job is to help businesses navigate that uncertainty and create more credibility around their costs, cash flow and profitability.”
Potluri discusses the impact of tariffs on importer costs and the ripple effects of the war in Iran, as well as considerations for reaching foreign markets such as assessing and mitigating risk.
“How can the company better budget their dollar cost, given the market is moving every single day,” she said.
While geopolitical disruptions can lead to short-term volatility — such as tariffs or armed conflicts affecting trade flows and investor confidence — Potluri takes a broader view in describing how currency rates change over time.
“While tariffs and geopolitical events matter, central bank policy and economic fundamentals are often the larger drivers for longer-term currency trends,” she explained.
The discussion also explores the relative strength of the U.S. dollar given these fluctuations. It remains the benchmark currency for much of the world, Potluri said, adding she doesn’t expect that to change anytime soon.
“The U.S. dollar remains the world’s primary reserve currency and continues to play a dominant role in global trade and international payments,” she said. “While there is growing discussion around diversification and alternative payment systems, the dollar benefits from the size of the U.S. economy, deep capital markets and global liquidity.”
Talking Trade is hosted by E.M Wasylik Associates Managing Director Ken Wasylik and M.E. Dey & Co. President and Managing Director Sandi Siegel and sponsored by the Dairy Farmers of Wisconsin, Carroll University and Michael Best Strategies.
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