The surge in currency volatility over the past fewquarters has increased concern among corporate finance executivesabout currency exposures, and it's encouraging companies tore-examine their hedging strategies.

The effects of the currency volatility have been highlighted bythe steady parade of big U.S. corporations reporting damage fromforeign exchange (FX) moves in their first-quarter earnings.Procter & Gamble blamed FX for a 2% drop in its sales.McDonald's said currency moves took $700 million off of its Q1revenue, and Pepsi said FX was likely to trim 11% from its earningsper share in 2015.

“The companies that are taking the earnings hits derive alarge portion of their sales from outside the U.S.,” said SanjayThoppil, a solution consultant at technology provider Reval. “Mostorganizations do a great job of hedging their exposure, butcurrency volatility and a strong dollar mean a hit toearnings.”

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.