A Weak Dollar and Stock Investing
The U.S. dollar has recently been weakening considerably relative to other currencies, driven at least in part by exceptionally low interest rates that reduce the appeal of holding the dollar. While the impact of a cheaper currency is complex and not entirely predictable, it does bring the benefit of making domestic products more competitive in foreign markets.
As this article notes, “technology companies might gain the most since they have a lot of international exposure while utilities and some traditional telecom companies (like AT&T and Verizon) may benefit least due to U.S.-focused businesses.” This dynamic can be beneficial for investors to understand as they evaluate expected cash flows for prospective investment opportunities.
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- Anthony Winkels is Managing Partner and Wealth Advisor at Fortis Wealth Management
