The Australian dollar took a tumble against the U.S. dollar yesterday following the release of weak inflation data. With any talk of rate rises now off the table, I believe the local currency could continue to fall lower over the next 18 months.
I'm not alone in this view. According to the most recent Westpac Banking Corp (ASX: WBC) weekly report, Australia's oldest bank expects the Australian dollar to fall to 66 U.S. cents by the end of next year.
Three shares which I believe will benefit from this decline are as follows:
Ardent Leisure Group (ASX: AAD)
Whilst Ardent Leisure may be best known in Australia as the operator of the Dreamworld theme park, its most important segment in my opinion is its US-based Main Event segment. Following the disposal of its Health Clubs and Marinas, Main Event now accounts for 63% of the company's EBITDA. I expect this will increase significantly over the next few years as management accelerates the roll out of its centres.
Nanosonics Ltd. (ASX: NAN)
Strong demand for this infection control company's ultrasound probe disinfection system recently led to it reporting an incredible 131% jump in half-year sales to $36.1 million. As the vast majority of these sales were generated in the U.S. market, the company is likely to benefit greatly from favourable currency movements.
Treasury Wine Estates Ltd (ASX: TWE)
Thanks largely to growing demand from the Americas and Asia, around 76% of Treasury Wine's earnings before interest and tax are generated overseas now. The key market for the company right now is the United States. With sales growing strongly in the country, I think Treasury Wine Estates could be a big winner from a weaker Australian dollar.
