How A Weaker Pound Can Boost Income

[Jon39]

Foreign exchange rates can sometimes be confusing, so maybe a practical example might be helpful.

If you hold shares in any UK businesses, which do their accounts in US Dollars (BP, HSBC, Shell etc.), then this will apply.

BP 2022 Q1 Dividend.
US 5·46 cents.
Paid 24th June 2022.

That dividend was increased by 4% (from 2021 Q1).

However, the payment received by UK shareholders increased by 17%.

That is due to the now weaker Pound (vs US$) compared to a year ago.
The increase even happens to exceed present inflation.
Obviously it sometimes works the other way around.

[Jon39]

mikesburns said:

Not so handy when we're paying for our oil in $.

Need to hold oil shares.
A good way to hedge rising fuel prices. At least you don't need to look at the fuel price, when filling the tank.

To be fair though, it works the other way around of course, but does depend a little on the company's net extraction cost.
There was a concentration on reducing that during the last oil price crash. Expensive fields being abandoned. For some I think it is now in the region of $25 a barrel, hence the good margins at present. The oil price has sometimes changed direction sooner than expected.