Predicting short-term currency moves or buying stocks solely on the basis of currency expectations is dangerous. There are better ways to profit from a lower Australian dollar.
This week’s equities sell off put currencies front and centre for investors. The US/China trade war escalated after President Trump placed a 10% tariff on another US$300 billion of Chinese goods, and China let the Yuan drop to an 11-year low against the Greenback.
Our share market is down almost 5% from its recent high as this column is written and the Australian currency is US67.17 cents. Our dollar hit a 10-year low this week after New Zealand’s central bank surprisingly cut interest rates. Investors fear the worsening trade dispute will cause a recession in parts of Asia and crimp global economic growth.