Strong Dollar Hitting Pockets Of U.S. Exporters

The rip-roaring dollar cut deeply into the earnings of multinational companies selling their wares overseas last quarter.

Photo Insert: Foreign exchange fluctuations are expected to reduce sales by 1% to 2% in 2023.

Last week, Caterpillar was among many US firms nothing "unfavorable currency impacts" affected its sales in the fourth quarter of 2022, Nicole Goodkind reported for CNN Business.

Apple, which reported its first quarterly revenue decline in four years, also blamed the strong dollar and bad exchange rates for its rough end to the year. IBM added to the chorus, saying that the dollar's strength hurt the company's bottom line.

"The last time I looked, the rate, the breadth, the magnitude of the change is the most we've seen in multiple decades," James Kavanaugh, IBM's chief financial officer, said about the dollar on the company's earnings call.

"We got hit with that." McDonald's and 3M also said in earnings reports that they were worried that the strong dollar would affect future sales. 3M said that foreign exchange fluctuations are expected to reduce sales by 1% to 2% in 2023.

The greenback is once again gaining steam as the market appears to be pricing in the probability of high interest rates for longer. That's bad news for the US companies that are just starting to feel some respite from last year's two-decade highs in the US dollar.

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