With oil back above US$100 a barrel, inflation pressures lingering and traders debating the Federal Reserve’s next rate move, currency swings are again front and center for investors. A stronger US dollar can help some companies and squeeze others, depending on where they earn and spend their money. This article focuses on US Dollar Strength Beneficiaries and how they are exposed to the latest developments in Iran and Fed policy. The article highlights three stocks from the screener that appear positioned to benefit from current currency trends and interest rate uncertainty.

NEXT (LSE:NXT)

Overview: NEXT is a long established UK retailer that sells its own and third party fashion, homeware and beauty products through stores, online platforms and franchise partners across the UK, Europe, the Middle East, Asia and other markets. It also offers credit, logistics and e commerce services to other brands, making it more than just a clothing retailer.

Operations: NEXT generates most of its revenue from Online (UK) at £2.6b and Retail stores at £1.9b, with additional contributions from Online (international) at £1.3b, Total Platform at £734.3m, Other Business Activities at £847.7m and NEXT Finance at £307.6m, while the UK remains its core geography at £5.3b of sales.

Market Cap: £17.4b

NEXT stands out in a strong US dollar setting because a sizeable online and import heavy model can benefit if sourcing costs ease, while its broad international footprint spreads demand risk. Earnings quality looks solid, with a ROE above 50% and profit margins at 12.9%. However, the company still faces real pressure from high debt levels and a UK retail backdrop where store profitability is not guaranteed. Management is putting serious effort into warehousing, technology and AI efficiencies, which could help protect margins if inflation stays stubborn. Analyst targets suggest expectations are already built into the price, so the key issue is whether NEXT’s execution on its Online and Total Platform ambitions can justify those assumptions.

NEXT’s high ROE and margin profile hint that its Online and Total Platform engine could be more powerful than the headline story suggests. Get the full context in the 2 key rewards and 2 important warning signs

Watches of Switzerland Group (LSE:WOSG)

Overview: Watches of Switzerland Group is a luxury retailer that sells high end watches and jewelry through well known banners such as Watches of Switzerland, Goldsmiths and Mappin & Webb, with showrooms, online platforms and wholesale partners across the UK, Europe and the US.

Operations: Watches of Switzerland Group generates most of its revenue from UK & Europe at £900.7m and US retail at £810.5m, with an additional £126.9m from US wholesale and a £10.2m eliminations adjustment.

Market Cap: £1.7b

Watches of Switzerland Group provides exposure to global luxury watch demand at a time when a strong US dollar can ease dollar based sourcing costs for a UK headquartered importer. Its US expansion, pre owned Rolex program and jewelry acquisitions add additional growth angles. Earnings have recently improved, with net profit margin at 5.4% and full year net income at £98.8m. However, a P/E of 16.8x, higher borrowing dependence and slower UK growth mean expectations carry some execution risk. With analysts divided on where the stock should trade next, the key issue is how this mix of growth projects and funding pressure could affect long term shareholders.

Watches of Switzerland Group’s US push, pre owned Rolex access and jewelry deals hint at a story investors may be underestimating. See how this growth mix shows up in the analyst forecasts for Watches of Switzerland Group and what it could mean in the future.

Citi Trends (CTRN)

Overview: Citi Trends is a US value retailer that focuses on affordable, trend right apparel, footwear, accessories and home goods for the whole family, with a particular emphasis on African American customers in neighborhood based stores. The company aims to combine fashion and everyday essentials in one place, from clothing and shoes to beauty, toys and small home items.

Operations: Citi Trends generates its US$849.1m of revenue entirely from Retail Operations in the United States.

Market Cap: US$529.1m

Citi Trends gives you focused exposure to US discount apparel at a time when a stronger dollar can help import heavy retailers manage costs while inflation keeps value conscious shoppers hunting for deals. Management is leaning into store expansion in proven neighborhoods, culturally relevant assortments and more extreme value branded product, and is also rolling out AI based tools and a new loyalty program that are intended to sharpen margins and improve customer loyalty. At the same time, the stock carries a high P/E, funding relies on external borrowing and earnings have been volatile over the past five years, so the key question is how much of this turnaround and growth story is already priced in.

Citi Trends' turnaround pitch and high P/E suggest that the market may be underestimating what comes next in this value retail story. See how the full setup looks in the analysis report for Citi Trends

The three stocks here are just a starting point, with the full US Dollar Strength Beneficiaries screen surfacing 15 more companies with equally compelling narratives that you can review through the US Dollar Strength Beneficiaries screener. Use Simply Wall St to identify and analyze the exact catalysts and storylines that matter to you so you can focus on the highest conviction opportunities for your portfolio.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.