What: The Aussie dollar has risen nearly 4% in this calendar year, rising from buying US89 cents to currently buying a little over US92 cents.
So what: Some economists are suggesting that certain factors including a massive increase in Australia's export of Liquefied Natural Gas (LNG) could see the currency head back to parity with the US dollar – a level not seen since April 2013.
Now what: Companies which have been enjoying a tailwind from the falling dollar could see this turn into a headwind if these predictions turn out to be accurate. While many ASX-listed companies could be under pressure from such a scenario, it could be particularly bad news for exporters of commodities.
Iron ore miners are one group that could be particularly hard hit. Not only are they already faced with a lower commodity price but they could soon have to battle a stronger currency. Fortescue Metals Group Limited (ASX: FMG) is particularly exposed in this regard as to a significant degree is Rio Tinto Limited (ASX: RIO).
Soft commodity exporters could also face increased competition as a result including grain marketer Graincorp Ltd (ASX: GNC) and beef producer Australian Agricultural Company Ltd (ASX: AAC).
