Aussie dollar shoots higher! Here are some ASX winners

The Aussie dollar has risen sharply against the US dollar. Here are some ASX shares that are benefitting (and some that are hurting)

ASX shares Australian dollar symbol on digital chart with green up arrow

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's no secret that the S&P/ASX 200 Index (ASX: XJO) has been having a rollicking good time of late. Even though the ASX 200 and ASX shares are down today, the index is still above the 7,000 points threshold that it broke for the first time since the pandemic last week.

Over the past month, the ASX 200 is now up about 4%. Not a bad performance. But another emblem of our collective national success has also been performing rather well. That would be our national currency – the Australian dollar.

It was less than 2 weeks ago that the Aussie dollar was flirting with 76 US cents. Today, it's broken above 78 US cents, its highest level since mid-March. A move of 2 US cents might not sound too dramatic. But that's a move of more than 2.5%, enough to change the playing field somewhat, as it were.

So what does a higher Aussie dollar mean for ASX shares?

Yes, the Aussie dollar can hit ASX shares

A higher Aussie dollar means that it is now cheaper to swap Australian dollars for US dollars (and some other currencies too). That, in turn, means that importing goods and services into the country is now cheaper than it was 2 weeks ago. Whereas exporting goods and services out of the country is conversely more expensive.

So how does that affect ASX shares? Well, any company that makes its proverbial living by importing goods will stand to benefit the most. Think Ampol Ltd (ASX: ALD), the petrol refiner and retailer. Petroleum is now relatively cheaper for Ampol to bring in. Or Harvey Norman Holdings Limited (ASX: HVN) and JB Hi-Fi Limited (ASX: JBH). These companies sell electronics and appliances such as iPhones, TVs, fridges and computers. All of these goods are generally made overseas, and they just got cheaper to bring into Australia. That's a benefit these companies can use to reduce their pricing at no cost to the business, or else bank the margin.

But for every winner, there is a loser. Companies that export out of Australia are at a disadvantage from this currency move in the Aussie dollar. Miners like BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) now will find it more expensive to sell their iron ore in US dollars. And any company that reports in US dollars will also face a disadvantage. Prominent examples include CSL Limited (ASX: CSL) and Altium Limited (ASX: ALU). So if you've been wondering why these companies have been facing some share price headwinds of late, this could be your answer.

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Economy

Animation of a man measuring a percentage sign, symbolising rising interest rates.
Economy

Here's the big four banks' revised interest rate predictions after the RBA left rates on hold

The RBA's decision shocked investors yesterday. What comes next?

Read more »

A hipster-looking man with bushy beard and multiple arm tattoos sits on the floor against a sofa reading a tablet with his hand on his chin as though he is deep in thought.
Share Market News

ASX 200 slides on unexpected RBA interest rate call

The ASX 200 is tumbling on the RBA’s latest interest rate announcement.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Economy

Tariff deals in focus: What's the likely outcome for Australia?

Brace for a new 'Liberation Day' on 1 August.

Read more »

Percentage sign on a blue graph representing interest rates.
Share Market News

Will ASX 200 investors get a supersized RBA interest rate cut tomorrow?

The ASX 200 could make some big moves tomorrow on any unexpected RBA interest rate announcement.

Read more »

A blockchain investor sits at his desk with a laptop computer open and a phone checking information from a booklet in a home office setting.
Economy

Major bank slashes interest rates 6 days ahead of RBA decision

What does this mean for investors?

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Economy

How could Trump's 'Big Beautiful Bill' affect the stock market?

Markets don't seem worried about this bill, but that could change.

Read more »

A female financial services professional with a manicured black afro hairstyle turns an ipad screen to show a client across the table a set of ASX shares figures in graph format.
Economy

Westpac becomes the latest big 4 bank to predict a July rate cut

What does this mean for investors?

Read more »

Oil rig worker standing with a clipboard.
Economy

What does the changing oil price mean for the ASX 200?

Oil continues to wobble with the tensions seen on the world stage.

Read more »