The dollar impact on earnings

24 April, 2015

With the US in the depths of the earnings seasons, it’s noticable once again the extent to which the dollar has been impacting some of the biggest US companies. The dollar index was up nearly 9% during Q1, following on from the substantial gains of the second half of 2014. The recent Fed minutes showed the extent to which the US currency is featuring in the Fed’s thinking. As we’ve said before, the extent of the dollar rally seen since the middle of last year is unprecedented in the era of fully floating exchange rates, so we should not be that surprised that it’s causing some pain on the bottom line.

The dollar itself was under pressure yesterday, more so against the single currency and yen,less so against sterling. We remain in a much more consolidative pattern in the bigger picture, the support from the Fed outlook having waned, both from a momentum perspective and also on the fact that expectations for the first Fed move have been pushed to later in the year. For today, we have the German IFO data at 08:00 GMT, with markets expecting a further push higher on the headline index to 104.5. There are also further meetings with respect to Greece, but the single currency is pretty much immune to the headlines here, waiting for a resolution one way or the other. US durable goods data is seen later in the day.


Source link  
Politics Influence Markets

With fears abating surrounding the threat of Catalan independence, the EUR moved higher overnight. Catalan President Puigdemont stated...

US Unemployment at Lowest Level

On Friday, the US Department of Labour released Nonfarm Payrolls for September. The meagre forecast of 88K was beaten with an even worse...

Further Strong Data From the US

On Wednesday, the US Institute for Supply Management (ISM) released Non-Manufacturing PMI for September that surprised the market...


Upbeat Data Boosts Dollar

On Monday, the US Institute for Supply Management (ISM) released data showing the index of national factory activity surged to a reading...

Harvey & Irma Effects Still Evident

The EUR suffered a second day of selling pressure, as the markets are growing concerned that the rise in right wing nationalism witnessed...

Risk-On or Risk-Off?

The rhetoric continues between North Korea and the United States with North Korea’s Foreign Minister, Ri Yong Ho, describing President Trump’s recent comments as “tantamount...


German & New Zealand Elections

The results of the German Election have re-elected Chancellor Angela Merkel for a fourth term. Her CDU party won fewer votes than was expected and Chancellor Merkel...

Fed Holds Rates for Now But...

Unsurprisingly, the Federal Reserve kept rates on hold following the end of its 2-day meeting on Wednesday. They did, however, indicate that...

UK Unemployment at 42 Year Low

UK unemployment fell to its lowest level since 1975, data on Wednesday revealed. Unemployment fell by 75K, bringing the unemployment...

  


Share: