The dollar has been sinking for two weeks now, with everyone watching to see if it crashes through the psychologically important threshold of $1.36 to the euro, the greenback's all-time low against the European currency. The weak dollar is great news if you are planning a shopping trip to New York but not so good if your pension or investments are tied up stateside.

On the surface, there might not be too much to worry about because American companies make up only 13.5% of our retirement funds. The trouble is that a lot of the non-US companies in which our pensions invest rely on America for a big chunk of their profits, including building materials group CRH and food stocks such as Kerry, IAWS and Glanbia. A falling dollar means these profits are worth less on this side of the pond.

The pain is already being felt, with fund managers blaming the greenback for flat investment performance during November, wiping out strong underlying gains arising from strong corporate earnings, mergers and acquisitions and easing oil prices.

Some investors, however, have been able to profit from the rout. Spread-betting firms, which let investors gamble on currency swings, report a surge in people betting against the dollar.

"We're seeing a lot of activity since the dollar broke through $1.30 in late November, " says Paul Kenny of Delta Index. "A lot of people missed this move but there's still plenty of potential. If it pulls back to $1.315-$1.32, there's a lot of potential to sell dollars and buy the euro."

He says the US currency will continue to be dragged down by expected interest rate cuts in America at a time when they are moving in the opposite direction in Europe.

Few investments will left unscathed but different stocks will be hit in different ways, according to John Sheehan, head of research at NCB Stockbrokers.

Companies that export to the US, such as Waterford Wedgwood, will suffer because a weak dollar makes their products look more expensive to American shoppers.

Companies that have set up shop stateside should get away more lightly because their underlying profits are unaffected by the sliding dollar. It's just that these profits are worth less on paper when converted to euro.

Nevertheless, investors cannot ignore the damage this will inflict on the bottom line. According to Sheehan's estimates, a 10% slide in the dollar would cut 6% from earnings at Kerry, 4%-5% at CRH, and 4% at Glanbia. This must inevitably rattle investor sentiment towards these companies.

At the other end of the scale, the weak dollar is good news for transport stocks such as Aer Lingus, Ryanair and ferry operator Irish Continental. Oil is one of their biggest bills and, because it is traded in dollars, the price of kerosene should tumble along with the US currency.

With the dollar on the ropes, America once again looks like a good place to pick up a bargain property, with hot spots such as Florida attracting a lot of overseas interest. But Noreen Hynes, managing director of Aquarius Properties, warns that it is difficult to assess the market as prices cool off after several years of boom.

"It's a highly complex market and now is not the time to rush in just because the dollar is cheap, " she says. "The fundamentals in Florida are a lot stronger than in other parts of the states but, if you pulled out speculators and international buyers, you'd have to wonder what the impact would be. It's very hard to know if now is a good or a bad time to buy."

But if your mind is already made up, Hynes advises that you make your move now.

"If you've decided to buy, there's no point sitting on the fence waiting to see how low the dollar is going to go, " she says. "The important thing is to start managing the currency implications of buying a property abroad."

To make a real killing stateside, especially on the stock market, the mood around the US currency would have to get a lot gloomier says Joe Mottley, head of equity strategy at Setanta Asset Management, which is owned by Canada Life.

"The dollar has gone from $1.28 to $1.33 in two weeks. That's a big, big move, " he says. "However, we're not seeing evidence of the overwhelmingly negative sentiment that would suggest a major low for the American currency."

Two years ago, when the greenback reached the nadir of $1.36 to the euro, the headlines were full of doom-laden predictions for America's economy. This time around, the mood is a lot more upbeat.

American companies that earn a lot of their money overseas are among the best bets for investors who want to profit from the weak dollar. This is because those overseas earnings will boost the companies' dollar profits.

"For global companies such as Procter & Gamble or Colgate, the value of their cash flows will increase in dollar terms, making them more interesting, " says Mottley. "The more overseas earnings a company has, the more attractive it becomes as the dollar weakens.

This is the type of area you'd want to be looking at."

American exporters, such as the motor industry, should also be on investors' shopping lists because a weak dollar makes the goods they sell cheaper overseas. But Mottley advises caution: "Ford and General Motors are such bad companies that a bit of dollar weakness is not enough for me to change my view."

Instead he favour high-tech stocks such as Texas Instruments and Micron Technology, which should find it easier to compete with Asian rivals when the dollar is weak. But it is a tough call.

"In the long term, currencies generally do what you expect them to do but in the short term they can be perverse, " according to Mottley.