NEW YORK (Reuters) – The negative impact of currency fluctuations on North American companies’ results fell in the fourth quarter of 2022 compared with the previous quarter, data from treasury and financial management firm Kyriba showed on Thursday.
The collective exchange-rate hit, including on companies in the United States, Canada and Mexico, was $28.94 billion in the fourth quarter of last year, Kyriba said in its report. That was down from $43.15 billion in 2022’s third quarter, which was the highest negative impact on record for the firm, with data going back to 2013.
The fourth-quarter 2022 negative impact was still up sharply from the year-ago period, when the hit was $4.56 billion, the report said.
Strong gains in the U.S. dollar for most of last year weighed on U.S. corporate results, with the currency boosted by aggressive interest rate hikes by the Federal Reserve.
The U.S. dollar index, which measures the greenback against a basket of currencies, was down 7.7% in the fourth quarter of 2022 and fell 0.9% in the first quarter of this year. The dollar index was up 8.2% for all of 2022.
A stronger dollar makes U.S. exporters’ products less competitive abroad while hurting U.S. multinationals that need to exchange their earnings into dollars.
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(Reporting by Caroline Valetkevitch; Editing by Leslie Adler)