Bracing for 2024 Currency Volatility and Headwinds with Kyriba

⇨ To help organizations get a better understanding of the impact of foreign exchange rates on their business, the liquidity performance experts at Kyriba recently released their Q1 2024 Currency Impact Report (CIR).

⇨ The report collected information from 1,700 companies in North America and Europe to determine the effects of foreign exchange rates on corporate earnings.

⇨ The report found that negative impacts from currency movements grew by nearly 45% from Q4 in 2023 to Q1 in 2024.

SAP organizations face consistent economic obstacles from operating internationally. Liquidity issues and foreign exchange volatility can hamper the ability of multinational corporations to effectively.

To help organizations get a better understanding of the impact of foreign exchange rates on their business, the liquidity performance experts at Kyriba recently released their Q1 2024 Currency Impact Report (CIR). The report collected information from 1,700 companies in North America and Europe to determine the effects of foreign exchange rates on corporate earnings.

“Currency volatility continues to pose a substantial risk to multinational corporations, significantly impacting their bottom lines. Our latest report underscores the heightened challenges companies faced in the first quarter of 2024. More importantly, it reinforces the critical need for strategic currency risk management and the use of advanced predictive analytics to mitigate these risks and optimize liquidity performance,” said Melissa Di Donato, Chair and CEO at Kyriba.

Key Findings

Kyriba’s Currency Impact Report found that negative impacts from currency movements grew by nearly 45% from Q4 in 2023 to Q1 in 2024. This accounted for an overall impact of $9.8 billion across the companies analyzed.

North American companies faced particularly volatile conditions, with a 219% increase in FX impact over the past quarter. These effects amounted to nearly $8.4 billion in negative impact. European companies, on the other hand, saw FX-related losses dip by 65% quarter-over-quarter, decreasing to $2.7 billion. The U.S. dollar ranked as the one of the most impactful currencies cited by organizations in this study, along with the Argentinian peso.

The report also held some positive indicators. While the vast majority of the FX impacts were seen as an overall negative, nearly 22% of these impacts were seen as positive tailwinds, bolstering companies to the tune of $2.7 billion.

“The early 2024 trends are showing an unexpected strength in the US dollar, thus forecasting a rise in FX headwinds for US corporations for the second half of 2024. Inflation, coupled with this strong dollar, is putting additional pressure on global economic stability, making it imperative for companies to employ robust risk management strategies,” said Andy Gage, SVP of FX solutions and Advisory at Kyriba.

Overcoming Volatility

Though companies cannot do much to change the overall economic circumstances in which they do business, they can prepare their finances to better alleviate the impact of currency fluctuations. Partners like Kyriba can help companies to forecast changes and optimize their cash flow and liquidity. This empowers businesses to make better strategic decisions and improve their overall financial health.