Fluctuations in currency exchange rates can have far-reaching consequences for international tours. Political instability, interest rates, inflation, and major governmental changes can all have a profound impact on the value of currency, the knock-on effect of which can affect the income of artists touring the world.
With a well-thought-out currency strategy, touring companies are able to mitigate such risks posed to their income and budgets. And to make sure that a touring party’s interests are as protected as possible, it’s important to take advice from professionals.
Freddy Greenish and Simon Liddell are the founders and directors of Chorus TM. A leading global payments and expense management platform specialising in the touring industry, they are experts in managing foreign exchange. Here they share thoughts on the 2025 currency landscape, as well as tips on managing foreign exchange at every step of the tour planning and recouping process.
“We have a unique insight into the foreign currency challenges faced by touring companies”
FOREIGN EXCHANGE
Foreign exchange (FX) is the world’s most traded investment market, and the currency exchange rate is the most important determinant of a country’s economic health. These rates move constantly as markets digest new information and react accordingly. The best way to measure a currency’s strength is over time, as economies become stronger and others weaken. For example, the British pound (GBP) has halved in value against the US dollar (USD) over the past 50 years.
There have been some big swings in currency exchange rates over the last few years. Brexit saw GBP lose 13% value, and Covid saw GBP lose 12% value against the USD in just two weeks. The result of this was that UK-based artists that had currency sitting in dollars were suddenly better off, but those needing to pay costs in USD saw their profit shrink or disappear. Such shifts in currency exchange rates have the potential to make or break a business, and with 30 years of experience in this industry, we have a unique insight into the foreign currency challenges faced by touring companies.
“USD has consistently been among the best performing currencies and is widely considered a safe haven currency”
CURRENCY RATES: ECONOMIC OUTLOOK FOR 2025
USD
2024 saw an “election supercycle” take place, with 77 countries around the world – representing half of the global population – going to the polls. Donald Trump’s win in last year’s US election also saw the Republicans gain control of the Senate and the House, therefore increasing his chances of implementing policies of lower taxes, deregulation, and protectionism. This will likely boost the value of the US dollar, which has consistently been among the best performing currencies and is widely considered a safe haven currency whose value retains or increases in times of uncertainty.
GBP
The British pound fared well in 2024, as economic growth proved to be stable, and UK interest rates remained high. In September, GBP was the best performing currency among the G10 of economically advanced nations; however, the autumn 2024 Labour budget and the start of this year have seen sterling drop significantly. Rachel Reeves’ mix of spending increases, high taxes on business, and extra borrowing for investment has concerned the market. The gilt market (the rate at which the British government can borrow money) has risen to highs not seen since 1998. To meet these increased costs, taxes will have to increase further or spending plans cut.
The outlook for 2025 is now uncertain, and further concerns for the prospect of stagflation are rising – meaning high inflation, low economic growth, and high unemployment. The Bank of England has downgraded its growth forecast, with fears over the status of the UK economy and job market. If the labour market data reflects business’s concerns and unemployment starts ticking up, the Bank of England will be forced to react. An aggressive monetary policy in 2025 could see quarterly interest rate cuts until the base rate hits 3.25% in 2026. Taking these all into consideration and lower relative interest rates will generally result in a weaker pound.
EUR
The European economy is far more vulnerable to trade policies imposed by the US than the UK, and the European Central Bank (ECB) has taken action to aggressively cut interest rates to support a weak economy. Structural issues in Germany and political instability in France will put further pressure on the euro throughout 2025, and the only way the ECB can react is by further cutting interest rates.
“Many current geopolitical challenges are unresolved, and all can have a huge impact on currency rates”
GEOPOLITICAL IMPACT
Many current geopolitical challenges are unresolved, and all can have a huge impact on currency rates. Peace and prosperity need to be promoted over economic uncertainty and aggression. As Israel’s war with Hamas continues and there are fears of other countries in the region becoming involved, the US could be forced to become more directly involved. Russia’s invasion of Ukraine continues although Trump has pledged to “solve” the conflict. That could mean withdrawing US backing if Ukrainian president Volodymyr Zelenskyy doesn’t accept a ceasefire. This would no doubt reduce the intensity of the conflict substantially, but whether that would be a long-term solution to the problem is highly unlikely.
MANAGING FX EXPOSURE
Touring globally means considering and managing multiple currencies and understanding how revenue can be maximised while minimising costs. Although there is no perfect solution, artists and their teams can benefit from being proactive rather than reactive when it comes to foreign exchange, and there are a number of ways to protect touring operations against the potential impact of unknown factors.
When preparing for a tour or project that will be exposed to foreign currency, we recommend speaking to an FX expert at the earliest opportunity. Once an account is open, and for no fee, we can help – from the early days of budgeting and pricing up a tour to looking at the best way to manage currency cash flows.
We like to look at historical charts and trends for the 3, 6, and 12 months preceding the touring period, which can give us an idea of general trends and allows us to look at potential levels where currency rates will meet resistance and support. We can then work with our clients by targeting specific rates.
“We would always recommend using forward contracts to lock a rate for a future cost or fee”
Get paid in local currency. This gives you control as to how much you want to exchange and when. It also lets you go to the market to receive a rate that you’re happy with, rather than having a poor rate imposed on you. Being paid in local currency allows you to net off income against costs and to avoid converting currency twice.
We would always recommend using forward contracts to lock a rate for a future cost or fee. Forwards are used to mitigate currency risk so that artists and teams can undertake touring activities without fear of the currency moving against them. It might be the case that at the end of the tour, the rate has moved in your favour – but equally, it can move in the other direction, and the effects of this need to be considered.
Technology continues to grow at pace and that’s particularly relevant in financial services. Speaking to bots and not being able to speak to a human can cost you money and also add a huge amount of frustration. Cutting-edge technology and great service do not have to be mutually exclusive, so we’d advise you to work with companies that provide both: a platform where you can access everything yourself but where you also have the support of a designated account manager and dealer that can be called directly when needed.
The Touring Business Handbook 2025 is out now.
Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.
