The Australian dollar (AUD) has rallied c7% against the US dollar since the start of 2016 on a combination of uncertainty about global growth and US Federal Reserve’s about-face on targeted interest rate rises amid lower growth and inflation, helping to support the currencies of commodity-exporting nations such as Australia. We believe the AUD is at the mercy of the USD and fluctuating commodity prices, with the market to remain volatile as investors look for clues on the market’s direction from US monetary policy. On a one-to-three-month view, we believe the USD is likely to remain soft and AUD supported on the carry trade and global currency wars. Over the medium term, we believe the USD should regain strength on the resumption of Fed rates normalisation process and likely further easing from the RBA and other major central banks later this year. So what does this mean for FX exposed healthcare stocks?