Sharjah24 - Reuters: U.S. companies are ramping up efforts to protect their profits from a relentless rally in the dollar, as the greenback surges to multi-decade highs.
The dollar has climbed about 15% against a basket of currencies over the last year, helped by a hawkish Federal Reserve and heightened geopolitical tensions that have boosted the greenback's safe-haven appeal.
That surge has reduced the profits of U.S. multinational companies that convert foreign currency into dollars, adding to corporate worries over soaring inflation and a murky economic outlook and pushing some to more actively seek ways to hedge their earnings.
Companies citing currency headwinds in their latest earnings reports include Coca-Cola Co, Procter & Gamble and Philip Morris International Inc. More broadly, analysts have lowered their overall forecast for S&P 500 second-quarter profit growth to 5.6% from 6.8% at the start of April.
"Corporates have been spurred into action by the dollar's untrammeled rise - and by the breaking of psychological barriers in most major exchange rates," said Karl Schamotta, chief market strategist at business payments company Corpay.
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