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U.S. dollar winners and losers Add to ...

The U.S. dollar is struggling again. Against the Canadian dollar, it has fallen to 97.3 cents (Canadian), down from par at the start of the year. More importantly, the U.S. dollar index - which measures the greenback against a basket of currencies - has fallen to 76.7, down from about 81 soon after the start of the year.

These declines strike fear in many Canadian investors, who worry that the shrinking value of their U.S. equity holdings and dividend streams when converted into Canadian dollars.

However, Bespoke Investment Group has crunched some numbers to see how U.S. stocks are performing when taking into account their foreign revenues. As the theory goes, U.S. companies with a lot of overseas sales activity tend to benefit when the dollar is weak because those revenues are worth a lot more. Conversely, companies with a lot of domestic exposure do better when the dollar is strong.

Bespoke broke the S&P 500 into 10 groups of stocks, based on percentages of international sales, and then looked at year-to-date performances for each group. Their findings: The group of stocks with the largest percentage of international sales has enjoyed the biggest gains, rising 7.7 per cent in 2011. By comparison, the group of stocks with no international sales lag with gains of just 3.1 per cent.

"Going forward, if you expect the dollar to continue its decline, the stocks with large amounts of international revenues should continue to outperform," Bespoke said on its blog. "If you expect the dollar to reverse course and head higher, the stocks with little or no international revenues should start to pick up."

Curiously, though, the results were quite lumpy. For example, one group with relatively few international sales (it ranked eighth among the 10 groups), is up 5.8 per cent this year. And the group that ranked second - meaning these stocks had substantial international sales - trailed with gains of 4.7 per cent.

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