Dollar bull run threatens corporate earnings

Banks warn translation risk set to become an important hedge

bull-market

US corporate treasurers could be forced to rethink their hedging strategies because of the dollar's bull run pressuring profit margins and the comparative share of foreign-currency revenues having grown significantly since the last time the greenback was on a major uptrend.

Since the break-up of the Bretton Woods system in 1971, the US dollar has experienced two major bull runs: in the 1980s and towards the turn of the century, when its value increased by roughly 50% in the space of five years.

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