The impact of weak dollar
If you have been paying attention, you will notice the dollar is getting weaker. Few Americans like the recent beating the U.S. dollar has taken; half of this year’s 8-10% slide has come in the past month. A sustained drop could lead to the Fed raising interest rates. The question is will this continue?, it's difficult to say, but with interest rates and growth rising in most other parts of the world, unlike the U.S., its drop may be sustainable. For one domestic group, American multinational corporations, who derive a good part of their revenues from overseas, this is good news.
In most analyst's view, a sustained, broadly based decline in the dollar could provide a big earnings boost for many U.S. multinationals, namely: Intel Corp. leads the Dow components in overseas exposure with 85% non-domestic revenue. Coca-Cola Co. (71%), ExxonMobil Corp. (69%), McDonald’s Corp. (66%), Hewlett-Packard Co. (65%), International Business Machines Corp. (62%) and 3M (61%). If the weak dollar continues its slide, it would be prudent to invest more in Multi-National Corporations such as the aforementioned.
