Insight to All Things Currency and Treasury Management

A benchmarking tool for corporations, North American and European multinationals reported a total of $7.44 billion in negative impact due to FX in Q2 2017 – a $740 million increase from Q1 2017.

This quarter also saw an increase in the number of North American and European corporates reporting FX impacts, with 220 North American and 31 European corporates mentioning it during earnings calls. Of the companies quantifying, North American corporations sustained $6.71 billion in negative currency impacts and European corporations sustained $730 million in losses.

Additionally, the average earnings per share (EPS) impact reported by North American companies increased to 4 cents – four times the industry standard of managing EPS at risk to less than 1 cent.

Q2 2017 also saw a rise in the percentage of corporates reporting impact (positive or negative) that fielded analyst questions during their earnings calls. This quarter, 40 percent of European corporates fielded analyst questions, as compared to only 14 percent in the previous quarter. Analyst questions also increased for North American corporations by 9 percent, up to 25 percent total this quarter.

This uptick in questions asked about FX impacts by analysts during Q2 earnings calls further demonstrates the continued importance for corporates to understand their FX risk and to manage their exposures as fully as possible. This level of FX risk management is not possible without access to accurate, complete and timely exposure data through the use of a currency analytics solution.

With on-demand access to data from ERPs, spreadsheets and other source systems, FiREapps aggregates transaction currency balance data to provide insight into the underlying drivers of currency exposures. This level of detailed information enables treasury teams to better manage their risk by providing them with a picture of their entire exposure, allowing for increased hedge ratios to mitigate the impacts of FX volatility.

To learn more about how North American and European multinationals were impacted by FX, download the Q2 2017 Currency Impact Report™ (CIR).