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Currency implications on your ASX shares can get confusing.
One such example is if you hold stocks for mining companies.
Many of those operate in Australia but sell the commodities in US dollars, because that’s the de facto currency of the global resources market.
Traditionally, the thinking is that a strong US dollar is favourable for investors of businesses like that.
The idea is that costs are spent in the lower Australian dollar, therefore minimising expenses — then the income is maximised as customers pay in the higher US dollar.
“In simple terms, a higher Australian dollar hurts exporters and companies that make money offshore while benefiting importers that end up paying less for their purchases,” said Finder expert Prashant Mehra in a blog post.
However, one expert recently disagreed with this theory.
No, a weaker US dollar is better for ASX miners
Shaw and Partners portfolio manager James…
