Next week it looks as though the U.S Federal Reserve is going to raise rates once again.
In fact, according to CME Group, the market is currently pricing in a 91.3% probability of a rate rise at its June 13 meeting. That 25-basis point rise would lift the target rate up to between 1.75% and 2%.
Looking further ahead, the data shows that the market has also priced in a 67% chance of another rate hike in September, lifting the target rate to between 2% and 2.25%.
Back home it is a very different story with many economists not expecting the Reserve Bank of Australia to raise rates until the end of next year.
I think this could put considerable pressure on the Australian dollar and send it down towards the 70 U.S. cents mark.
This could give companies with exposure to international markets a boost from favourable currency movements. Three that I expect to benefit are listed below:
Appen Ltd (ASX: APX)
Almost all Appen's revenue is derived overseas, with the majority of it in U.S. dollars. In FY 2017 a strengthening Australian dollar was a headwind for this machine learning and artificial intelligence dataset provider, reducing revenue by approximately $5.5 million and EBITDA by $1.2 million. This headwind could become a tailwind in FY 2018 if the local currency tumbles lower.
Aristocrat Leisure Limited (ASX: ALL)
In its recent first-half results Aristocrat Leisure generated $764.9 million or 47% of its revenue in the Americas segment. In addition to this, its fast-growing digital business generated 33.7% of total revenue. While this segment is not broken down geographically, the United States is believed to be the main market for its games. As a result, I see Aristocrat Leisure as a big winner from a weaker Australian dollar.
Hansen Technologies Limited (ASX: HSN)
Another potential winner from a weaker Australian dollar could be this billing and data management solutions provider. In the first-half of FY 2018 Hansen delivered a 36.3% increase in revenue to $118.4 million. Approximately 24% of this revenue was generated in its Americas segment. This could make Hansen worth considering as a patient buy and hold investment.
