Economists warn that the strong Dollar is the biggest threat to the U.S. multinational And energy corporation

According to the economists the re surging Dollar is the biggest threat to the U.S. corporate earnings. It was also suggested that, the U.S. based multinationals will suffer the most and it was also suggested that, some of the companies in the Wall Street are even talking about an earning recession.

According to the market experts, the Dollar had a gain of 22 percent in the last 12 months against a basket of major currencies. It was also reported that, Revenue and earnings from foreign markets are worth less when transferred into Dollar. Market experts also said that, costs also become comparatively less against rivals, producing in countries with declining currencies.

According to the Bank of America/Merrill Lynch strategists the strong Dollar could generate an “earnings recession.” Market analysts said, it means that, there will be two successive quarter of declining earnings from the year earlier-quarter. According to Wall Street experts, historically 25 percent gain in the U.S. Dollar in a 12-month period suggest that, there will be a 10 percent decline in the markets earnings per share.

According to the market analysts approximately one-fifth of companies from S&P 500 issued warning on earnings for the first quarter. It was also reported that, 49 companies had reported the effect of Dollar on their earning in their reports.

In a statement CEO of Richard Bernstein Advisors in New York and Wall Street analysts Richard Bernstein said, “This is just the beginning. This impact of the Dollar on U.S. earnings could last for three to seven years. It may not happen every quarter but there’s a secular risk to U.S. earnings, primarily to multinationals, as the Dollar appreciates.”

It was also predicted that, S&P 500 earnings will keep falling as companies will reveal the impact of Dollar on their earnings in the next few weeks. According to a recent market data, Dollar gained nearly 3.5 percent against six major currencies- the Euro, Yen, Pound, Swiss Franc, Swedish Krona and the Canadian Dollar.