Currencies
Signs of a strengthening U.S. dollar should be good news, right? Alas, for investors, a weak dollar actually has its benefits.
We live in an increasingly global economy, with many major U.S. corporations deriving a substantial chunk of their revenue from foreign countries. McDonald's (NYSE: MCD), Coca-Cola (NYSE: KO), and Citigroup (NYSE: C) take in more than half their revenue from abroad, with the Golden Arches' European revenue alone outpacing its U.S. sales. Even Yahoo! (Nasdaq: YHOO) generates about 30% of its revenue abroad.
How to Profit From the Dollar's Recovery
Unless you've been hiding in a cave for the past several years, you know just how hard the U.S. dollar's value has been hit. Yet despite ongoing concerns about weakness in the economy, the dollar has reversed its seven-year slide in recent months, rising nearly 10% against the euro.
What to Do When the Dollar Crashes
The dollar has dropped a huge amount in the past several years, against many of the major currencies. Of course, the real time to start worrying about the dollar was seven years ago, when it sat at levels 50% higher against the euro. But even after such a significant drop, these days, you'd have a hard time finding someone who’s truly bullish on the U.S. dollar.
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