US dollar enters centre stage for earnings

The dollar has moved from a supporting role to a featured player this earnings season, a boon to US multinationals which have benefited from the biggest quarterly year-on-year decline in the greenback in three years.

Since the start of October, at least 35 US companies have cited currency “benefits” or “tailwinds” and “weaker dollar” for boosting quarterly earnings, compared with few mentions a year ago, and some see that extending to the fourth quarter, a Reuters analysis shows.

“The quarter was one where the dollar weakened over the course of the quarter, more so than analysts expected,” said Jill Carey Hall, equity and quantitative strategist at Bank of America Merrill Lynch in New York.

“That's what's in part been helping multinationals,” Carey Hall said. “They have seen some of the strongest results so far.”

The US dollar index's .DXY average in the third quarter fell from its year-ago level by about 2.5 percent, the weakest showing since 2014, Thomson Reuters data shows.