UK plc would see its annual profits of pounds 60bn soar by nearly pounds 5bn if the dollar made the same progress against the pound that it has made against the Japanese yen over the past five months.
However, the impact of the dollar on translation of profits from US subsidiaries, exports and trade done in dollars will be offset by any dollar-based raw material purchases. And any gains that the pound makes against European currencies will erode the profits of companies that have business there, especially if they source their raw materials in dollars.
Clear winners are oil companies such as Enterprise, Lasmo, and Premier, which sell all their products in dollars, but meet their costs in other currencies. Other companies singled out by the stock market over the past week have been Hanson (46 per cent of profits in dollars), Siebe (52), BAT(36), Glaxo Wellcome (43) and Williams (48).
There are other big winners, too. According to broker Kleinwort Benson, which monitors big companies' dollar earnings, at least 12 British companies in sectors such as drugs, advertising, food, chemicals and insurance broking do more than half their business in dollars (see table).