Currencies and Inflation, Long-Term Investing

Industries That Benefit From a Strong U.S. Dollar

In the past, industries whose profitability rose 12 months following the rise in the US dollar were:

  1. pharmaceuticals
  2. food products
  3. insurance
  4. household products
  5. commercial banks
  6. tobacco companies

These are consumer driven industries……

All of the major commodities trade in US dollars. If the US dollar is rising you can bet that the global price of commodities is falling. This fact is often overlooked when investors try to find reason for share value declines. Crude oil and gold have recently fallen from record highs. These drops correlate directly with the rise in the US dollar. We are in the heat of the American economic slowdown. As the ripple effect from the sub prime fiasco continues to expand, we urge all of you to remember the following statement: The United States fell first and fell the hardest. The world will look to them to rebound just as strong and just as fast.