FedEx Exchange Risk
The majority of FedEx's transactions are in the U.S. dollar, but foreign exchange currency risk exists with the British Pound, Canadian dollar, Chinese Yuan, euro, Hong King Dollar, and the Japanese yen. During 2012 and 2011, foreign currency fluctuations positively impacted the operating income. At May 31, 2012, a uniform 10% strengthening in the value of the dollar relative to currencies in which transactions were denominated would result in a decrease in operating income of $75 million in 2013 (FedEx Annual Report 2012, 2012). This assumes each exchange rate changes in the same direction relative to the U.S. dollar.
Some of the foreign currencies are stronger than the dollar, creating more profits, and some of the currencies are weaker than the dollar, creating losses in revenues. If the overall currency mix is stronger than the dollar, there will be additional revenues. If the overall currency mix is weaker than the dollar, or the dollar strengthens causing more weakness in other currencies, then there can be loss of revenue. Where the dollar strengthened...
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