Beware The Strengthening Dollar
The steady crumbling of the value of the U.S. dollar over the last two years has given a big boost to reported earnings at many U.S. companies that sell goods overseas in local currencies but report in dollars. That group includes a host of large tech companies, among them, hardware makers like Hewlett-Packard (HPQ), IBM (IBM) and Sun Microsystems (JAVA).
But over the last several weeks, the dollar has reversed course, and strengthened against the Euro and the yen. And that poses some noteworthy issues for tech industry earnings in the next few quarters.