The Australian dollar has plunged more than 7.5% in the last month and is now sitting below US87 cents, close to a four-year low. However, that could just be the beginning with the Reserve Bank of Australia wanting it to fall as much as 8% further to help the economy weather falling commodity prices.
With that in mind, the smart investors are positioning themselves to profit handsomely. While some are busy acquiring US-listed equities or shorting the AUD, others are simply buying normal, everyday companies listed on the ASX which generate a large portion of their earnings overseas. As a perfect example, ResMed Inc. (CHESS) (ASX: RMD), Westfield Corp Ltd (ASX: WFD) and Amcor Limited (ASX: AMC) are presenting as great buys now.
ResMed Inc., which develops and manufactures products for the treatment of various respiratory disorders, generates the majority of its earnings in the Americas and Europe. Respiratory disorders such as sleep apnea are becoming more prevalent in ResMed's key markets which should provide a solid driver for growth over the coming years. Earnings and dividends are reported in US dollar terms, meaning investors will also benefit from the favourable currency movements.
Global shopping centre giant Westfield Corp is another fantastic way for investors to profit from the plunging dollar. A total 70% of Westfield Corp's operations are based in the US while the remaining 30% is in the UK. Given the rate at which both economies are recovering, sales and overall earnings should continue to grow strongly over the coming years.
Finally, global packaging company Amcor is another excellent stock to consider. The company has grown earnings and revenues at very impressive rates in recent years and that trend is expected to continue into the future, particularly thanks to its exposure to emerging economies. Roughly 30% of group revenue was generated in the Americas in FY14 so a falling AUD should benefit investors who buy shares today.
