The U.S. dollar's recently-halted bull-run has weighed heavily on company dividends across the world this year, with full-year expectations for payments dramatically cut by Henderson Global Investors on Monday.
At its peak in March, the dollar was up 11 percent against a basket of currency year-to-date. However, it has since declined, partly as a result of gains to the euro, and is now up around 3 percent on the year.
As a result of the volatility, Henderson forecasts that dividends will decline by 3 percent this year, having previously expected growth of 0.8 percent. The revision would take total dividend payments around the world to $1.134 trillion, some $42 billion less than forecast by the firm in January.
"The effect of the strong dollar is set to be even greater in the second quarter when Europe and Japan pay a large share of their annual dividends. In fact, if the current exchange rates persist, the impact could be as much as $40 billion," said head of global equity income at Henderson, Alex Crooke.
"In any given period, exchange rates can have a very large effect on dividend payments, but our research shows that over time they even out almost entirely, so investors can largely disregard them if they take a longer-term approach," he added.