Which startups will benefit most from a strengthening dollar? And will changes in the value of major currencies cancel out a particular region?
The US dollar is having a good year. The US dollar indexFor example, which tracks the value of the dollar against other currencies, it bottomed out at about 95 points in early January. Since then, its value has risen to 106.69 points as of today – and we’ve seen the US dollar equal that of the euro, having enjoyed a premium over the former for the last 20 years.
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The changing relative value of major currencies impacts technology revenues. For example, US tech giants reported large currency-related effects on their Q2 results. Microsoft grew 12% in the second quarter of 2022, but by 16% if we were to remove the impact of currency movements. The same issue also cost Microsoft 5 percentage points of net income growth over the same period.
Microsoft was not alone. Outgoing Meta COO Sheryl Sandberg said in her company’s latest earnings report that changing currency values ”had a significant impact in the second quarter, particularly the depreciation of the euro against the dollar.” Indeed, the now infamous year-on-year revenue decline that Meta reported in the second quarter would have actually been 3% revenue. grow currencies would have remained, Sandberg said.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.