From Yahoo Finance: 2025-05-20 08:00:00

The unexpected devaluation of the US dollar due to tariffs has boosted corporate earnings in North America during the first-quarter earnings season. The dollar is down more than 6% since the beginning of the year, benefiting companies like Meta Platforms Inc. and Microsoft Corp. who expect foreign exchange to boost revenue by hundreds of millions.

The weakening of the greenback in 2025 has been a tailwind for large multinationals with high foreign sales exposure, according to a Morgan Stanley team. Positioning in the derivatives market suggests more losses ahead for the US currency, with one-month risk reversals on the Bloomberg Dollar Spot Index being the most bearish since March 2020.

Corporate forecasts reflect the impact of the dollar slump, with companies like Procter & Gamble Co. seeing their estimated foreign exchange impact fall by a third to $200 million compared to the start of the year. On the other hand, companies like Germany’s SAP SE, which generates earnings in the US currency, expect a hit to earnings next year as currency hedges expire.

Despite some concerns easing, some companies are likely to continue benefiting from a weaker dollar. Bloomberg Intelligence Chief FX Strategist Audrey Childe-Freeman believes there is a structural negative narrative for the dollar that will persist, providing ongoing advantages for certain companies.



Read more at Yahoo Finance: Tariff-Driven Dollar Woes Help Brighten First-Quarter Earnings