Which ASX shares benefit from a strong Australian dollar is an important question for investors betting on a stronger AUD.
The currency has done a lot of work over the past year.
It buys near 72 US cents, according to the Reserve Bank's daily exchange rates.
Twelve months ago, it bought around 65.5 US cents.
That is a move of roughly 10%.
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Why the currency matters for ASX shares
The mechanism is relatively straightforward.
Companies that import goods and sell them here pay less for their stock.
Companies that sell in United States dollars and report in Australian dollars bring home less.
The Reserve Bank's commodity price index shows how large this effect has become.
Over the year to August, the index rose 15.5% measured in special drawing rights but only 5.8% measured in Australian dollars.
Roughly ten percentage points of a true commodity upswing has been eaten by the currency.
The Reserve Bank has raised the cash rate three times in 2026, to 4.35%, and held it there in August.
Its August statement made the connection explicit.
Despite depreciating since the May Statement, the Australian dollar remains higher than at the start of the year, consistent with the tightening in monetary policy in Australia compared with other economies.
Wesfarmers: The importer's advantage
Wesfarmers Ltd (ASX: WES) is one of the clearest domestic beneficiaries.
Kmart and Bunnings both source heavily from Asia in United States dollars.
A stronger Australian dollar lowers the landed cost of everything on the shelf.
FY26 revenue rose 3.4% to $47.3 billion, with net profit after tax was up 8.3% excluding significant items to $2.87 billion.
Bunnings earned $2.46 billion before tax on revenue of $20.4 billion, while Kmart Group lifted earnings 6.0% to $1.11 billion.
The important nuance came from Kmart Group managing director Aleksandra Spaseska on the results call.
From a fuel and an ocean freight perspective, it is an inflationary environment. The strengthening of the Australian dollar plays a mitigating impact to all of that.
She also explained why the benefit arrives more slowly than investors would have liked.
The business hedges twelve to eighteen months ahead, so spot rate moves do not flow through immediately.
For investors, that means most of the currency benefit from this year's move is still ahead of Wesfarmers.
ResMed: The other side of the trade
ResMed Inc (ASX: RMD) shows the opposite.
The business itself is performing well.
FY26 revenue rose 10% to US$5.65 billion, with non-GAAP earnings per share up 17% to US$11.17.
The problem for Australian holders is translation.
ResMed lists here through CDIs and declares its dividend in United States dollars, converted at the record date.
The most recent quarterly payment of US$0.66 per underlying share converted to just 9.28 Australian cents per CDI at an exchange rate of 0.7112.
The same American dividend buys fewer Australian cents when the currency is high.
The same arithmetic applies to the share price itself.
Despite this, chief executive Mick Farrell was upbeat about the underlying business.
We closed fiscal year 2026 with strong fourth quarter results, reflecting continued momentum of our global business, sustained demand for our market-leading products, and disciplined execution of our strategy.
Foolish takeaway
Currency may be a tailwind or a headwind.
However, I would not buy Wesfarmers purely because the Aussie dollar is high.
The shares sit on a price-to-earnings ratio above 30, and most brokers are cool on them.
Nor would I sell ResMed over an exchange rate, since its weakness this year owes more to a product safety action than to the currency.
What the strong dollar does is change the order in which good businesses compound.
