The value of the Australian dollar against the U.S. Dollar has fluctuated wildly over the last 12 months. Our dollar reached a high of 97 U.S. cents in late 2013, before plunging to below 87 cents in January, and then recovering to nearly 95 cents in early July.
Ready to Fall
Experts have been mystified by the ability of the Australian dollar to remain so high in the face of an improving U.S. economy and signs of weakness in Australia brought about by the end of the mining boom and poor consumer sentiment.
The latest plunge in the dollar to around 87.5 cents appears to be due to investor nervousness about the economy and once again has the experts out saying that this is the last we'll see of the dollar above 90 cents.
I'm not game to make a call either way, but investing in quality companies that could benefit from a lower Australian dollar over time does appear sensible.
Lower Australian Dollar = Higher Profits from U.S. Operations
Australian investors may have noticed that some of the biggest and best ASX-listed companies with a significant proportion of earnings in U.S. dollars have either maintained or grown their share price during the recent fall in the share market.
Here are five companies that have outperformed over the last month and stand to benefit from a lower Australian dollar:
Rigid packaging group Amcor Limited (ASX: AMC) derives the majority of earnings from the U.S. and maintains a dominant market share. Shares are up 2% over the last month.
Global blood plasma products company CSL Limited (ASX: CSL) is one of the brightest global stars on the ASX. The company's shares are up 2% over the last month.
Computershare Limited (ASX: CPU) operates share market registries in Asia, Australia, and New Zealand, Canada, Europe, the UK, Africa and the United States. The company's shares are flat over the last month against a 6% fall in the ASX 200.
Iress Limited (ASX: IRE) offers financial tools to professionals in Australia, New Zealand, Canada, the UK and South Africa. The company's shares are down 2% over the last month.
Brambles Limited (ASX: BXB) provides container and pallet pooling solutions to companies all over the world. The company's shares are flat over the last month.
For me, the most interesting part of the recent ASX pullback has been the plunge in the price of bank shares, and the fact that the Motley Fool team predicted it!
