The Australian dollar has rebounded from its lowest price in six years, after American retail sales were weaker than expected.
During Thursday's session, the local dollar sank to a low of US75.6 cents following the release of jobs data by the Australian Bureau of Statistics. Not only was that its lowest price since May 2009, but also below its long-run average.
However, the unit rose above US77 cents on Friday morning after data showed that US retail sales had fallen by 0.6% in February, marking the third straight month of declines. While the result was well below the 0.3% rise expected by economists, the outcome was mostly blamed on the freezing temperatures suffered in the US during those months as well as low wage gains.
Until that data was released, the market had been pricing in the likelihood of the US Federal Reserve hiking interest rates in the coming months which would strengthen the US greenback. Now however, the market appears to be questioning how the results could impact the Federal Reserve's timing on increasing interest rates.
An opportunity to profit
Despite the dollar's sudden rebound, it's unlikely to last too long. With the exception of the retail data, other figures have shown that the US economy is recovering at a rapid clip. At the same time, Australia's economy is suffering at the hands of the commodities crisis with unemployment sitting near a 12-year high.
The great thing is, the true weakness of the local currency does not yet appear to be priced into the shares of many Australian-listed companies with significant US exposure, meaning that you can position yourself to benefit.
Global shopping centre giant Westfield Corp Ltd (ASX: WFD), packaging company Amcor Limited (ASX: AMC), medical device maker ResMed Inc. (CHESS) (ASX: RMD) and investment bank Macquarie Group Ltd (ASX: MQG) are all companies which you could buy today to profit from the weaker Australian dollar.
