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.
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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
