Dollar bull run threatens corporate earnings

Banks warn translation risk set to become an important hedge


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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