“As they sell in local currency this will be a negative theme over the coming year with a strong greenback,” he added.What they’re saying: Still, foreign exchange volatility is “a headwind for Big Tech with 35% to 40% of sales in Europe, and strong dollar a 400 top-line headwind,” veteran tech analyst Dan Ives tells Axios in an email. Most of them sell software-based services, rather than physical goods like cars or makeup. It’s unusual to see big tech (certainly not this many companies at the same time) cite currency volatility as an issue. currency is creating what the Financial Times referred to last week as a “currency shock muddled an earnings period that was being closely studied for signs of a weakening global economy.” Particularly against the euro and yen, the U.S.That's boosting the greenback’s value in major markets like Europe, where a strong greenback has railroaded the common currency to a 20-year low.ĭriving the news: During the Q2 reporting season, Netflix, Google, IBM, Microsoft, Apple and Spotify are among big tech names citing the “super dollar” as a drag on earnings.

The Federal Reserve’s offensive against spiking inflation is pushing up rates.Needless to say, with interest rates soaring alongside inflation expectations – even as growth falters – these are hardly normal times. Why it matters: In normal times, car companies and other multinationals that sell physical goods are the most sensitive to dollar fluctuations. Big technology companies are reaping the whirlwind of a strong dollar, as the sector becomes an unlikely victim of foreign exchange volatility.

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