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3 share ideas to profit from the falling Australian dollar

The Australian dollar took a tumble against the U.S. dollar yesterday following the release of weak inflation data. With any talk of rate rises now off the table, I believe the local currency could continue to fall lower over the next 18 months.

I’m not alone in this view. According to the most recent Westpac Banking Corp (ASX: WBC) weekly report, Australia’s oldest bank expects the Australian dollar to fall to 66 U.S. cents by the end of next year.

Three shares which I believe will benefit from this decline are as follows:

Ardent Leisure Group (ASX: AAD)

Whilst Ardent Leisure may be best known in Australia as the operator of the Dreamworld theme park, its most important segment in my opinion is its US-based Main Event segment. Following the disposal of its Health Clubs and Marinas, Main Event now accounts for 63% of the company’s EBITDA. I expect this will increase significantly over the next few years as management accelerates the roll out of its centres.

Nanosonics Ltd. (ASX: NAN)

Strong demand for this infection control company’s ultrasound probe disinfection system recently led to it reporting an incredible 131% jump in half-year sales to $36.1 million. As the vast majority of these sales were generated in the U.S. market, the company is likely to benefit greatly from favourable currency movements.

Treasury Wine Estates Ltd (ASX: TWE)

Thanks largely to growing demand from the Americas and Asia, around 76% of Treasury Wine’s earnings before interest and tax are generated overseas now. The key market for the company right now is the United States. With sales growing strongly in the country, I think Treasury Wine Estates could be a big winner from a weaker Australian dollar.

This fourth share could also benefit thanks to its international expansion plans. At present it pays a HUGE market-beating dividend which I think could get even bigger over the next few years.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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