Strong Dollar Boosts Wesfarmers But Hurts ResMed

The Australian dollar has strengthened by around 10% over the past year, reaching near 72 US cents according to the Reserve Bank's daily exchange rates. This change can significantly impact companies that import goods and sell them in Australia, as well as those that report earnings in Australian dollars but sell in US dollars.

Wesfarmers Ltd (ASX: WES) is one such company that benefits from a strong Australian dollar. The company imports heavily from Asia in US dollars, which lowers the landed cost of goods on its shelves. In FY26, revenue rose 3.4% to $47.3 billion, with net profit after tax up 8.3% excluding significant items to $2.87 billion.

Kmart Group managing director Aleksandra Spaseska explained that while the strong dollar provides a mitigating impact on inflationary pressures, its benefits arrive more slowly than investors would like due to the company's hedging strategies.