Recent currency volatility has led to huge costs for North American companies. The costs due to these currency changes are approximately $29 billion, and this is just in the first quarter.
This is a global problem, too. Companies across the world have felt the negative effects of a volatile currency, dealing with billions of dollars’ worth of costs as the foreign exchange continues to fluctuate dramatically.
It is a big change from just recently. The costs due to currency volatility were $19 billion not too long ago, but they quickly rose. It is a major problem that has companies all over the world worried.
One reason is the rising value of the US dollar, but it is not the only factor at play. In fact, there are several, and they change with each currency. The US companies feel the impact of the euro and yen the most. With the yen’s decreasing value, it is a hard hit. As currencies affect each other, the global concern and costs grow. Currencies continue on their volatile path all around the world. With the second quarter coming to a close, there is no saying how these currencies continue to affect the economy and the costs for businesses on a global scale.
Costs have risen dramatically since last year. Nearly 30 percent of companies have stated that they have experienced negative effects as a result of currency volatility. Earnings per share are up, too. Companies have seen huge changes since last year that are mostly due to the changes in currencies.
Costs and increases over this last quarter have a lot to do with the currencies’ current state. It is expected to continue into the second quarter, too, though there is still some time left until we know for sure. Companies are going through a lot of changes as the currencies grow and struggle.
Right now, most currencies are struggling. There is a decrease in value across the board. The euro and yen, as examples, have dropped quite a bit against the dollar. The dollar, on the other hand, is doing well. For nearly a year straight, it has continue on an upward path. All of this has led to the currency costs facing companies today.