Will a weaker euro lead to more US investment in European startups? – Marketingwithanoy

Which startups will benefit most from a strengthening dollar? And will changes in the value of major currencies cancel out a particular region?

The US dollar is having a good year. For example, the US Dollar Index, which tracks the value of the dollar against other currencies, hit a low of around 95 points in early January. Since then, its value has risen to 106.69 points as of today – and we’ve seen the US dollar equal that of the euro, having enjoyed a premium over the former for the last 20 years.

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The changing relative value of major currencies impacts technology revenues. For example, US tech giants reported large currency-related effects on their Q2 results. Microsoft grew 12% in the second quarter of 2022, but by 16% if we were to remove the impact of currency movements. The same issue also cost Microsoft 5 percentage points of net income growth over the same period.

Microsoft was not alone. Outgoing Meta COO Sheryl Sandberg said in her company’s latest earnings report that changing currency values ​​”had a significant impact in the second quarter, particularly the depreciation of the euro against the dollar.” Indeed, the now infamous year-on-year revenue decline that Meta reported in the second quarter would have actually been 3% revenue. grow currencies would have remained, Sandberg said.

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