As tensions between the US and China escalate, Australia sits uncomfortably in between its biggest export market and its largest investor.
Government data show that almost 30% of all Aussie exports are sent to China, while the cumulative amount of US investments in Australia is over $850 billion as of the end of 2017.
In addition, US overnight interest rates are now higher than Aussie rates for the first time in over 18 years, and the domestic current account deficit has swelled to 2.2% of GDP
This combination of factors leaves the AUD/USD vulnerable to a protracted down move over the course of 2018.
Investors looking to profit from a lower AUD/USD can buy the BetaShare ETF with the symbol: YANK.
YANK is an inverse ETF, which means the price of YANK increases as the AUD/USD trades lower. It also has a weighting of 2.5%, which means the unit price will fluctuate by 2.5% for every 1% change in the AUD/USD exchange rate.
With a current price of $13.60, we calculate that the price of YANK will be near $16.50 as the AUD/USD returns to the January 2017 low of .7160.
BetsShare ETF: YANK
Todd has worked in the financial industry for 20 years. During this time, his primary focus has been in the Foreign Exchange, Global Equities and Fixed Income areas. Todd has also served as a Judicial Advocate in several tax cases in the US Federal Court.