Will currency headwinds continue to hit US earnings?

The impact of currency headwinds

With the US dollar showing no signs of weakening, investors will need to focus on the domestic market in 2015 in order to avoid ‘currency translation' issues, says Nick Ford, manager of the CF Miton US Opportunities fund

It has been a terrific period for investors in US stocks over the last two years. Bears have been carried out as the S&P 500 raced up 45% since the beginning of 2013. Bulls have had two powerful forces in their favour. Firstly, exceptionally low interest rates and a sharp decline in US treasury bond yields have justified higher equity valuations - particularly for growth stocks such as Facebook and Disney. Secondly, the dollar has been on a tear, gaining 18% against a basket of international currencies since last June. This has pressured many global money managers to increase exposure...