The Motley Fool

Is the Australian Dollar (A$) headed above 80 US cents?

The Australian Dollar (A$) (AUDUSD) is up 2% this month to over US 79 cents.

Is the Australian Dollar (A$) headed above 80 US cents?

I have been pretty negative on the Aussie dollar over the past few years. Meaning: I think it will fall.

I don’t — and won’t — try to make money from a rising or falling AUD. I’m not a currency trader.

But I know that over time currencies tend to gravitate towards the country with the stronger economy. The country with higher interest rates and lower unemployment.

By recognising this, savvy long-term investors can take advantage of momentary currency weakness to transfer their investment monies into the foreign currency.

That’s why 90% of my investment portfolio is in US dollars, held in my optionsXpress brokerage account.

(Note: I do NOT receive anything for saying that I use optionsXpress)

For example, I used strength in the Aussie dollar last year to buy shares of technology company PayPal; US banking heavyweight Wells Fargo and Twitter Inc.

Then, I bought more US dollars earlier this year. I used the cash to buy shares of and Berkshire Hathaway, Warren Buffett’s company.

Anyway, back to the currency…

I have been more than happy to take my Australian dollars, transfer them to US dollars in my brokerage account and buy shares of these great companies.


Firstly, if you don’t have more than 30% of your wealth overseas I think you are doing something wrong. The Australian sharemarket was just 1.5% of the world’s total the last time I checked.

So, believe me, or not, the evidence states that it is less risky to invest overseas.

Secondly, take a look at the Aussie economy and ask yourself whether or not our 26+ years of nonstop economic growth can continue. Remember, currencies generally — over time — gravitate towards the stronger economy.

Just ask Zimbabwe.

Finally, even if I get it wrong and the Australian dollar goes higher (which would be ‘bad’ for me — because my money is in US dollars), what am I left with?

Shares in some of the biggest and best companies on earth?

It could be worse.

Rich listers know the power of dividend shares!

In FY 2018 share market investors are staring down the barrel of ballooning global debt and potential geopolitical powder keg. But thankfully one Foolish expert is revealing 5 of his favorite dividend payers for wealth-creating income whatever the global weather...

But you must act now. This updated report is available for a limited time only, and your copy is 100% free. So don’t miss out!

Simply click here to receive your free copy of "Our Top 5 ASX Dividend Shares to Earn You Money in 2018" right now.

Motley Fool Contributor Owen Raszkiewicz owns PayPal, Wells Fargo,, Berkshire Hathaway (B shares) and Twitter shares. Owen welcomes and encourages your feedback. You can follow him on Twitter @OwenRask.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Amazon, Berkshire Hathaway (B shares), PayPal Holdings, and Twitter. We Fools may not all hold the same opinions, but we all believe that considering a makes us better investors. The Motley Fool has a . This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.