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Allegations set to fuel conflict over air tankers

The Financial Times (9/5, Pfeifer) reports, "Rolls-Royce should be an obvious beneficiary of the rising dollar," as "the world's second- biggest jet engine maker bears most of its costs in sterling." Even thought the company is moving "to 'dollarize' its production to lower-cost, dollar-denominated markets," the U.K.'s "Derby is still its largest manufacturing site" and "it books the majority of its sales in dollars." While any "rise in the dollar should therefore be good news for Rolls-Royce," the "immediate, positive impact will be delayed by the company's extensive hedging policy." Actually, the rise "could even hurt" Rolls-Royce's "profits in the short term." The company "has had the same approach to hedging for more than 20 years, continuously selling dollars forward in order to ensure visibility for the future." Rolls-Royce "has told investors that, given the recent rise in the dollar, it expects the average annual exchange rate it achieves to deteriorate by between seven and eight cents, costing it £100 million more than it did last year."