Related: One dollar could soon equal one euro
Consider that Microsoft (MSFT, Tech30) reported solid earnings Tuesday, but its shares dropped as much as 10% because it’s forecasting weaker sales abroad due to the strong U.S. dollar. The same is true for Procter & Gamble (PG) and United Technologies (UTX), some of America’s biggest companies, which employ thousands.
“There are limits to how much further the U.S. dollar can appreciate before it starts to bite more seriously into economic activity,” says Sheryl King, senior director of research at Roubini Global Economics and a former Bank of America economist.
Oil’s onerous cost: Similar to the dollar, there are two sides to the dramatic drop in oil prices from over $100 a barrel last summer to $45 now. Americans love cheap gas at the pump, but low oil prices are forcing corporations to scale back on jobs and spending.
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