The Reserve Bank of Australia will have a tough decision to make when it meets in April.
It has elected to keep interest rates on hold at a mere 2% since May last year, and would likely prefer to keep it that way for fear of adding fuel to the fire that is Australia's residential property market.
However, the RBA will have to at least consider easing monetary policy even further, based on the strength of the Australian dollar.
Indeed, the RBA's deputy governor Phillip Lowe has gone on record as saying he'd prefer to see the local currency buying around US 65 cents.
It got close earlier this year when it hit US 68.28 cents, but it has since rampaged higher and even rose above US 75 cents on Thursday. It's retreated marginally since to US 74.75 cents.
Still, it's a long way from Lowe's comfort zone, whereby a weaker dollar is desirable as it will make our exports more competitive compared to those of other nations.
More exports mean more business for Australian companies, while it would also help the government to reduce the federal deficit.
Of course, the situation may fix itself – particularly if iron ore plummets again. But if the dollar remains at these levels for much longer, the RBA may be left with no other choice:
It may have to cut interest rates.
Of course, that's the last thing that savers want to hear. They're already earning a pittance on their bank deposits, and whatever they are making is likely getting eroded by taxes and inflation.
But for dividend investors, it could be a whole different story…
High-yield dividend shares such as Commonwealth Bank of Australia (ASX: CBA) and Woolworths Limited (ASX: WOW) rocketed in recent years as the RBA eased interest rates lower.
Basically, their yields were becoming increasingly attractive compared to other 'risk-free' assets, so investors were piling their money into the shares for a piece of the action.
Woolworths is dealing with a number of issues right now, and might be best avoided, while the banks are also facing a number of headwinds as well.
Some investors will see value in their shares following a sharp fall, but I think there are better alternatives to consider instead.
Three Dividend Shares That Need Your Attention
One company to consider adding to your portfolio is Westfield Corp Ltd (ASX: WFD).
The shopping centre giant generates all of its earnings in the United States and the United Kingdom, so is a good candidate to benefit should the Australian dollar resume its downward trend.
As it doesn't earn money in Australia, it doesn't attach franking credits to its dividends, but it still offers an attractive 3.4% dividend yield (note: that would improve with a weaker Australian dollar).
Telstra Corporation Ltd (ASX: TLS) is another great company to consider for value and dividends.
The telecommunication giant's share price has been crunched over the last 12 months to trade at $5.13 (down from a high of $6.53).
The quality of the business hasn't changed, but its dividend yield certainly has. At today's price, the shares offer a lucrative 6% fully franked dividend yield, grossed to 8.6%!
You could also look toward Transurban Group (ASX: TCL), the owner and operator of toll roads in Australia and the United States.
Given the importance of some of its roads, it has strong pricing power in the market and could be a great long-term addition to your portfolio. Better yet, it offers a reliable dividend yield of around 4%.
Foolish takeaway
It's still unclear if, or when, the RBA will actually cut interest rates again. However, there is little doubt that interest rates will stay low for quite some time still. That's why shares offering solid dividend yields are still a great way to build your wealth in the long run.
