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Currency Swings Shave $29 Billion off of Profits

In Q4/2022, global FX markets were costly for North American companies, but less so than in Q3/2022.

By Anya Andrianova | May 19, 2023 at 08:33 AM
Stock illustration: Currency fluctuations

Volatile currencies once again wreaked havoc on North American corporate profits in the fourth quarter, underscoring the importance of hedging and risk management for firms that do business overseas.

Swings in global foreign exchange (FX) markets cost the companies about $28.9 billion in the last three months of 2022, according to Kyriba Corp. That puts the total amount of North American corporate profits lost due to currency moves last year at $121 billion.

Impact from the euro, Canadian dollar, and yen were most frequently mentioned during the earnings calls of public companies with at least 15 percent of their revenue tied to foreign business, according to the Kyriba’s analysis. The Australian dollar and Brazilian real were also cited. JPMorgan Chase & Co.’s gauge of global FX volatility soared last year by the most since the global financial crisis in 2008. Traders in 2022 were contending with the impact of aggressive monetary tightening, stubborn global inflation, and concern about economic growth and geopolitical risks.

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