More top global financial executives expect a stronger dollar to help their bottom line than see harmful effects from the currency's rise, a private survey released on December 09 showed. Twenty-four percent of corporate treasurers and chief financial officers said they expected a stronger dollar to improve their companies' earnings in 2014, compared with 19 percent who said they expect a "detrimental" effect, according to the Association for Financial Professionals' annual business outlook survey.
Their outlook for 2015 was nearly identical. A stronger dollar lowers costs of imported oil and raw materials. "The increase (in the dollar) is in part due to the strength of the US economy relative to economies in much of the rest of the world, particularly those in parts of Europe and Asia that have either teetered with or fallen into a recession during 2014," the report said.
On December 08, the dollar index, a gauge of greenback's worth against the euro, yen and four other major currencies, rose to its highest level since March 2009. The dollar hit a seven-year peak of 121.86 yen, while the euro slipped to a nearly 28-month low of $1.2247, according to data on the EBS trading system.
The AFP, which is based in Bethesda, Maryland, warned that the greenback's strength made US exports more expensive and affected businesses' decisions on where to produce and sell their goods as well as where to park their corporate cash. More than half of financial executives expect the dollar would further appreciate against the euro and yen next year.
Forty percent of executives surveyed anticipated the greenback would gain against the Chinese renminbi in 2015, while 35 of them said the dollar would strengthen versus the British pound.
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