The strength of the U.S. Dollar cost American firms $43.2B between July and September last year.
Foreign-exchange volatility had a negative impact on corporate profits
in the period but pressures likely eased in the last three months of
2022, analysts said.
- Currency
oscillations in the third quarter had the greatest negative impact on
U.S. corporate profits ever recorded, according to a report by software
firm Kyriba Corp.
- U.S. companies said they were most affected by volatile exchange rates with the Euro, Canadian Dollar, and Ruble.
- Losses between July and September spiked by 26% compared to the previous quarter.
- The record-setting third quarter marked four consecutive quarters of profit destruction that cost firms $97B.
- Volatility
likely decreased in the last quarter of 2022 as currencies to which
U.S. firms had high exposure strengthened relative to the Dollar.
- The U.S. Federal Reserve's interest rate hikes in 2022 contributed to a rally in the value of the U.S. Dollar.
- The rally has stalled as currency traders anticipate less aggressive rate hikes going forward.
