The Australian dollar ($A) has undertaken a marked depreciation against the US dollar ($US)
The Australian dollar ($A) has undertaken a marked depreciation against the US dollar ($US). Most commentators (including Clime) have long been suggesting that a significant adjustment is on the cards. Investors therefore should be looking for stocks leveraged to a falling $A, such as domestic retailers. The commodity price boom is over and the period of record low interest rates that has propped up the $A is coming to an end, which will see the local currency weaken. At a macro level the Australian economy has become a hostage of the $A. If the $A falls, it will provide a growth and inflation stimulus to the economy which will flow through to a number of sectors and stocks. But if the $A stays strong, domestic companies are in trouble, and as predicted by senior Treasury officials, Australians will experience a sharp fall in living standards. Read the report: (VIEW LINK)
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