Foreign exchange (FX) volatility cost North American and European companies $22.5 billion in the first quarter, when a weaker dollar proved beneficial to many U.S.-based multinationals.

The currency blow to profits in the first three months of the year was down from the heights of 2022, corporate-treasury management company Kyriba Corp. said in a report Tuesday. According to Kyriba, North American companies absorbed a $121 billion hit last year from FX volatility, which soared along with the surging U.S. dollar as the Federal Reserve lifted interest rates aggressively. Turbulence has subsided from last year, but spiked in March at the time of the U.S. banking tumult.

“We’re still sustaining a fairly high impact from FX to corporate earnings,” Andy Gage, Kyriba’s senior vice president of FX solutions, said in an interview. “That’s being fueled by interest rate adjustments that central banks are doing to try to fight off inflation.”

A softer dollar in the first quarter did offer a reprieve for U.S.-based firms. That’s because for those companies with sales abroad, the value of international revenue increases when the dollar falls, and vice versa. A buoyant euro was the most commonly discussed currency in first-quarter earnings calls of North American firms, alongside the Canadian dollar and Chinese yuan, according to Kyriba.

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