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Strong Dollar to Stifle Earnings of US Multinational Corporations: Reports

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The dollar's strength has a negative effect on US-headquartered multinational corporations' operations, according to foreign exchange research firm BK Asset Management.

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MOSCOW, January 6 (Sputnik) — The dollar's strength has a negative effect on US multinational corporations' operations, dealing a blow to their earnings, CNNMoney reported on Tuesday, citing foreign exchange research firm BK Asset Management.

"Their earnings are going to suffer," Kathy Lien, a currencies analyst at BK Asset Management, was quoted as saying by the news website. "You're going to see more earnings misses than positive surprises as a result of the dollar's strength."

US-headquartered corporations could suffer because of the necessity to convert income earned abroad into dollars.

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According to the news outlet, beverage corporation Coca-Cola, pharmaceutical company Johnson & Johnson and toy manufacturer Mattel are among the US corporations that have already indicated that the currency could have a negative impact on their earnings.

However, the news agency noted that large importers could benefit from the strong dollar, as they are able to enjoy more buying power.

The dollar has been on the rise recently amid falling oil prices, with the euro hitting its lowest level against the US currency in the past nine years on Monday. According to Bloomberg, the same day the Intercontinental Exchange's Dollar Index that measures the dollar against other world currencies rose to its strongest level since December 2005.

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