Exchange Rate Movements

Assignment Topic 2 AUD/USD Exchange Rate The main drifts of the AUD/USD metamorphose localise in the past eighteen months leave be studied, as well as the underlying conditions that caused these specific movements to happen. Economic models and theories volition be used to support the discussion and to analyse the primer for these fluctuations. Discussion will then take place to whether these movements hit been a help or a hindrance to the general health of the Australian parsimony. FIGURE 1.0 As seen above in record 1.0, the main direction of the AUD/USD commute locate everyplace the past eighteen months has been in a positive direction, shown present by a simple 15 day base average over the worth of the AUD in $USD. FIGURE 1.1 Figure 1.1 above shows the four main fluctuations that have happened to the AUD/USD exchange rate in the past eighteen months that will be discussed in this essay. To understand these movements, the conduct and supply for these two currencies on the abroad exchange grocery store has to be discussed. FIGURE 1.2 The foreign exchange market concerning the AUD/USD is a flexible exchange rate system, and is find by free market forces. Like any new(prenominal) free market, it puke be modeled by the motive and supply graph, as seen above in Figure 1.2.

QUT world-beater Point Slide, Module 8, Tommy Tang, 2007_2 Fluctuations in the foreign exchange market occur from a change in either the demand or the supply for that particular currency, thus changing the price of the exchange rate. The reasons behind the changes in supply and demand will be analysed for the four major movements noted in the exchange rate of the AUD/USD over the past eighteen months. The first movement that will be analysed is the major up trend that started slightly the end of June 2006 and continued to trend until approximately August of 2007. This can be seen in Figure 1.1 next to box 1. The economy in general was very strong at this condemnation and world commodity prices were... If you want to get a estimable essay, order it on our website: Orderessay

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