The Australian dollar has plunged nearly 4% over the last seven days and looks set to continue its downwards trajectory in the near future. Weak Chinese construction figures, a tumbling iron ore price and a strengthening US economy all look likely to continue impacting the local currency.
As it stands, the Australian dollar is buying US90.11 cents, down from US93.63 just one week ago. However, if history is anything to go by, there could be much further to fall considering it has averaged just US76.64 cents over the last 20 years.
Here's how you can profit
While that's not so good for Aussie importers, it's great for our exporters and other companies with fantastic foreign exposure. Here are three companies which could be amongst the biggest beneficiaries of this trend…
Westfield Corp Ltd (ASX: WFD)
About: Westfield Corp was created as part of Westfield's controversial reshuffle earlier this year. It owns and operates all of Westfield's shopping centres in the U.S. and the U.K.
Opportunity: While both economies are still in their recovery phase, Westfield stands to benefit from improving consumer and business confidence. As they both improve, so should sales and overall profitability.
The company reports its earnings (and dividends) in US dollar terms and then repatriates earnings back to Australia. As such, a lower exchange rate will only boost its earnings and yield.
ResMed Inc. (CHESS) (ASX: RMD)
About: ResMed is involved in the development, manufacturing and marketing of products for the treatment of various respiratory disorders, with a particular focus on sleep-disordered breathing.
Opportunity: The rate of sleep apnea is quickly growing across the world, particularly thanks to our Western lifestyles and growing rates of obesity, and ResMed is in the box-seat to benefit. In financial year 2014, ResMed made 54% of its overall sales in North and Latin America and 36% in Europe, while only 10% of sales were made in the Asia Pacific.
Like Westfield Corp, ResMed Inc. reports its earnings in US dollar terms and pays its dividend quarterly.
Select Harvests Limited (ASX: SHV)
About: Select Harvests is an Australian almond producer which generates a significant portion of its earnings by exporting its products overseas.
Opportunity: Select Harvests' shares rose as high as $7.24 earlier in the year but have since fallen back to $6 as a result of poor weather conditions affecting its crop. Given the severe drought currently blanketing California, the world's largest producing region, almond prices continue to climb which should continue to benefit Select Harvests.
In addition, Select Harvests offers a very generous dividend which is currently sitting at 3.3%.
