The majority of analysts and economists are predicting another cut to the official Australian interest rate when the Reserve Bank of Australia meets on Tuesday. They believe a cut is needed to slow down demand for the Australian dollar following poor economic data out of the US, which has pushed the exchange rate back towards 80 US cents.
Top Stocks
Australian companies that generate a significant portion of earnings from overseas, or report in US dollars, stand to benefit because those earnings now translate to a greater amount of Australian dollars. In addition, goods produced in Australia are now cheaper for the US to import.
10 Top Blue-Chip Stocks for a Lower Australian Dollar
Here are 10 companies set to benefit from the lower Australian Dollar and some details about their operations:
Rigid packaging group Amcor Limited (ASX: AMC) derives 95% of earnings offshore and 30% from the US.
Global blood plasma products companies CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH) are two of the brightest global medical stocks on the ASX. They both generate a portion of sales in the US, however negative exchange rate movements in Switzerland may lessen the impact.
Computershare Limited (ASX: CPU) operates share registries in Asia, Australia, and New Zealand, Canada, Europe, United Kingdom, Africa and the United States.
Iress Ltd (ASX: IRE) offers financial tools to professionals in Australia, New Zealand, Canada, the UK and South Africa.
Brambles Limited (ASX: BXB) provides container and pallet pooling solutions to companies all over the world.
Fortescue Metals Group Limited (ASX: FMG), BHP Billion Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Santos Ltd (ASX: STO) will all see higher Australian-dollar denominated prices for their commodities, boosting their competitiveness globally, although US-dollar debt will lessen the benefit.
And Westfield Corp Ltd (ASX: WFD) has a portfolio of properties in the US and a development pipeline that will generate profits in US dollars. The group's earnings should receive a boost, however the majority of the group's costs are also in US dollars.
One set of companies unlikely to benefit from a lower Australian dollar will be the big four banks, in fact it could put them at risk!
