Washington--US exporters and multinational companies are beginning to feel the pain from a dollar that has hit its highest level in 12 years.
But analysts say the greenback's sharp climb will only slightly slow the overall US economy.
From farm exporters to the chemicals industry, the moaning is growing more audible about losing competitiveness to competitors in Europe, Brazil and elsewhere.
On Wall Street, companies like IBM, Kimberly-Clark, Microsoft, Procter & Gamble, and Caterpillar have all blamed slower earnings on the currency.
Earlier this week software giant Oracle said revenues in its most recent quarter, at $9.3 billion, were 6 percent lower than they would have been if the dollar had held steady.
In the past year, the dollar has soared 32 percent against the euro, 39 percent against Brazil's real, 18 percent on the yen, 16 percent on the Canadian dollar, and 13 percent against the pound.
Overall, against a trade-weighted basket of currencies, the rise has been 20 percent. For US export rivals, that is a strong gain in their competitiveness.
It gives, for instance, farmers in Brazil and Canada big advantages.
"It has an especially large impact on the wheat and cotton sectors, where we export half of the crops or pretty close to it," said Richard Pottorff of farm industry specialists Doane Advisory Services.
Steve Meyer of Iowa-based consultant Paragon Economics says US pork and chicken exporters are beginning to feel the pain."Any time the value of the dollar goes up it makes our products more expensive."
"It's not as if you can't grow, but it certainly makes it more difficult. You've got to find some more creative ways to market your products."
- 'King Dollar' hits Wall Street -
The problem is mounting as well on Wall Street, said Nicholas Colas, chief market strategist at the brokerage Convergex.
"If you run a US multinational company, or own its shares, 'King Dollar' is proving to be a bit of a tyrant."
Colas pointed out that analysts are slicing their earnings forecasts for listed companies.
They now predict an average 1.9 percent fall in revenue for the third quarter this year, compared to predictions of a 1.7 percent rise just two months ago.
"No company hedges for revenues so the impact on sales growth will be fully visible," Colas said.
AFP
