What do Apple, Coke and gold have in common? A falling dollar could give them a lift
Irina Gutyryak

A strong dollar represented one of the core conditions of international commerce during 2022, creating a significant headwind for some of the highest-profile U.S. companies. However, that strength has been waning since September and recent central bank decisions suggest that downward pressure on the greenback could continue.
Which areas of the market will benefit most from a slumping dollar? And what can investors do to capture that upside?
Historically, areas like gold, big tech and large U.S. exporters have benefited from a weakening dollar. To exploit the situation, investors can select the appropriate stocks and ETFs that give them exposure to these areas (more on the specifics in a bit). Meanwhile, there are also investing vehicles tied directly to currency changes.
A Slumping Dollar
Since the dollar index (DXY) peaked in late September, it has tumbled 11.5%, including a slide of 2% in January. The index has fallen from 114.78 in September to around 101.50 in Thursday's intraday action. This retreat has taken the widely followed measure of U.S. dollar strength below its 50-, 100-, and 200-day moving averages.
Here's a graph detailing the retreat:

Currency ETFs
A decline in the dollar signals an appreciation in counterparty currencies. In other words, the downward pressure in the dollar can also be looked at as strength in currencies like the Euro, Japanese yen, Swiss franc, and the Australian dollar.
These moves can be tracked in ETFs like the Invesco CurrencyShares Euro Trust (FXE), Invesco CurrencyShares Japanese Yen Trust (FXY), Invesco CurrencyShares Swiss Franc Trust (FXF) and the Invesco CurrencyShares Australian Dollar Trust (FXA), which have all appreciated lately.
Meanwhile, activity in the U.S. dollar can be tracked through investment vehicles like Invesco DB US Dollar Index Bullish Fund (UUP), WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU), and Invesco DB US Dollar Index Bearish Fund (UDN) also noticed price swings.
Gold
There exists a long-standing inverse relationship between gold and the dollar. This has held up recently, as the dollar began its decline late last year. When the dollar peaked in September, the precious metal hovered near $1,625 an ounce. Since then, gold has gained roughly 18% to $1,920 an ounce.
The push higher in the yellow metal has provided support for both spot gold ETFs and gold miner funds. See below a handful of names that have been supported by a collapse in the dollar:
Gold ETFs: SPDR Gold Trust ETF (NYSEARCA:GLD), iShares Gold Trust ETF (IAU), Sprott Physical Gold Trust (PHYS), VanEck Vectors Gold Miners ETF (GDX), VanEck Vectors Junior Gold Miners ETF (GDXJ) and the Sprott Gold Miners ETF (SGDM).
See a chart highlighting the inverse price action of gold and the dollar since late September:

U.S. Exporters & Multinational Brands
A strong dollar makes U.S. products less competitive on the global market. A rising greenback makes U.S. goods relatively more expensive, providing a stumbling block for U.S. companies that garner significant revenue from overseas.
As an example, Pfizer (PFE) reported in November that a strong dollar had hampered its 2022 revenue expectations by $700M.
Meanwhile, multinational brands face the same types of headwinds during periods of a strong dollar. In its latest earnings report, which covered a three-month period that already saw the dollar turn lower, McDonald's (MCD) reported consolidated revenue that slipped 1% from last year. However, leaving out the impact of foreign currency exchange (that is, leaving out the effect of a strong dollar), revenue would have climbed 5%.
MCD noted a similar impact on operating income, with currency exchange cutting the growth rate in half. The figure rose 8% during the quarter, but the metric was 16% higher on a constant currency basis.
These firms should benefit from a countertrend. A lower dollar should boost headline figures for companies like PFE and MCD, as well as other big names in a similar situation, like Coca-Cola (NYSE:KO) and Proctor & Gamble (PG).
For KO, the company reported operating income growth of 7% in its most recent quarterly results. However, this rate of expansion was reduced by 10 percentage points due to the impact of currency. Looking at PG, the firm's last quarterly update showed a revenue decline of 1% compared to the previous year. However, leaving out currency fluctuations and other items, organic sales advanced 5%.
Big Tech
The dynamics for Big Tech echoed those of more traditional exporters and multinational brands. As a subset of the giant global players, these companies also suffered from a strong dollar headwind in 2022.
Apple (NASDAQ:AAPL) provides an example. In the firm's Q4 earnings conference call, held in November, company management said: "So obviously, the strong dollar makes it difficult in a number of areas. Obviously, our pricing in emerging markets makes it difficult, and the translation of that revenue back into dollars is affected."
As the dollar comes down, these conditions reverse, giving results a boost. Beyond AAPL, this can help players like Microsoft (MSFT) and Alphabet (GOOG) (GOOGL).
Whatâs Next for the Dollar?
Monetary policy has turned against the dollar, feeding into the recent moderation. This week, the Federal Reserve announced a 25-basis point rate hike in its key rate, slowing down its pace of increases from the 75-basis-point and 50-basis-point jumps it had announced previously. 
At the same time, the European Central has stepped up its rate hikes. On Thursday, the ECB announce that it was pushing rates higher by 50 basis points. As the U.S. starts to slow down its rate increases and other central banks catch up, that puts downward pressure on the dollar.
In other U.S. dollar news, Morgan Stanley strategists cut their forecast for the U.S. dollar, saying the greenback is losing its carry advantage as the global growth shows signs of buoyancy and macro and inflation uncertainty ebbs.