scroll

Investing in US market with a rising AUD

Advanced Search

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 06/12/2025

Investing in US market with a rising AUD

Hi James and team, Thank you for your insightful market views and strategies in particular portfolio positioning discussions, ETF Fridays, deep dives and Shaun's trade ideas. With the AUD rising and expected to do so with RBA holding rates and Fed cutting, what would be a good strategy for reducing exchange rate loss for holding US stocks? Or would it be better to repatriate funds back to AUD and utilise the ETFs for major indices with hedged and unhedged options (eg. IVV, NDQ, QUAL etc.). What would be your views on the AUD/USD trend in the medium term? I also found your deep dive on APA and DBI very informative. It seems that both have long term issues affecting their values. What would be your recommendation for long term dividend/growth stocks for retirement income/intergenerational portfolios? Finally, copper prices are still rising notwithstanding being stretched. Would it be too risky to top up holdings now and if so what would be a good price level to do so? Many thanks as always. Adel

Answer

Hi Adel,

We are looking for the $A to trade above 70c as the Fed cuts rates and the RBA contemplates hikes – a 6% move against unhedged investments in the US, but we are equity investors, not currency traders, and generally remain unhedged.

We wouldn’t advocate repatriating funds because of a potential 6% move but a couple of other points could influence our thoughts in some areas:

We like a lot of ASX tech names at current levels and can see outperformance compared to their US peers in 2026.
We prefer ASX resources stocks at current levels compared to their US peers with the 6% a useful contribution on top here – assuming we are correct on FX.

For long term dividend growth, the Market Matters Income Portfolio is open for investment:

The portfolio has returned +11.35% pa for the last 5-years, 5.08% above its benchmark to consider Investing click here.

In terms of copper, in the short term we are closer to trimming/selling as opposed to buying.

chart

Australian 3-Year Bond v US 2-Year Bond Yields

LAST UPDATED 05/12/2025 15:36

Latest Reports

Weekend report 06/12/2025

Weekend Q&A: The week of Central Banks is upon us

The ASX 200 recovered late in the week after a sluggish start, finishing up +0.2% over the five days. It was a notably quiet week overall, with the index trading within a narrow 0.8% range. However, on the sector level, it was another very polarised week with the materials +3% and energy +2.4% sectors extending recent strength while the rate-sensitive tech, healthcare and consumer discretionary names continued to struggle with the futures market now pricing in one, perhaps two rate hikes by the RBA in 2026, what a difference a few weeks make!

Afternoon report 05/12/2025

The Match Out: ASX flat as UBS pushes Lithium upgrades

A mildly positive session for the ASX today, and enough to secure a second straight weekly gain as investors continue to recalibrate expectations for interest rates. The RBA steps up to the plate on Tuesday, no change expected, though commentary is important, while the US Federal Reserve is tipped to cut rates on Thursday.