Winners and Losers From Our Falling Dollar

Stock market implications

The 6% fall in the AUD/USD is good news for the domestic economy stock market in general. We estimate the S&P/ASX 100 would see a 3% rise in NPAT from a 10% depreciation in the AUD. Healthcare and materials have the most to gain, while consumer discretionary and energy also benefit. Industrials would see a dip in earnings, but this is mostly due to one stock (QAN) and its large USD cost base.  

Stock specific implications

Resources, healthcare, consumer discretionary and energy are the big winners from the weaker AUD. Other sectors are less affected. However, QAN has a large USD cost base and, because of its relatively large market cap in the sector, this pulls down earnings for the industrials sector. 

Thanks to RBS Morgan for the data.