FILE PHOTO: Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick Wilking
July 13, 2021
By Caroline Valetkevitch
NEW YORK (Reuters) – The negative impact of currency fluctuations on North American company results increased in the first quarter to the highest level since the second quarter of 2020, data from treasury and financial management firm Kyriba showed on Tuesday.
The collective exchange rate impact, including on companies in the United States, Canada and Mexico, was $5.87 billion in the first quarter, compared with a $1.39 billion negative effect in the fourth quarter of 2020, Kyriba said in a report. It was the most since a $14.16 billion impact in 2020’s second quarter.
S&P 500 companies are just beginning to report results for the second quarter of 2021, with JPMorgan and other banks due to report this week.
The rise in total currency impacts is “a break in the low trend we have seen in the last two quarters,” and “is potentially due to the continued volatility of the USD,” Kyriba said in Tuesday’s report.
Kyriba said 77 North American companies reported currency impacts in the first quarter, compared with 28 in the fourth quarter of 2020 and 69 in the third quarter of 2020.
The U.S. dollar index rose 3.6% in the first quarter of this year but has weakened since then. It lost 0.9% in the second quarter.
On Monday, the dollar climbed across the board as concerns about the pandemic encouraged investors to seek a safe haven.
A stronger dollar makes overseas sales less valuable when converted back into U.S. currency.
(Reporting by Caroline Valetkevitch; editing by Richard Pullin)
Source: One America News Network
