Analyses REASONS for AUD movement (2004-09) and the effects on the Australian economy (1 Viewer)

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Hey! i'd appreciate any tips on how to go about this qu. Any!!

 

[gnrlies]

Re: Analyses REASONS for AUD movement (2004-09) and the effects on the Australian eco

Well two things:

Firstly you need to define a measure - I.e. aud / usd? or something else. In actual fact aud / usd is quite insufficient as it does not measure underlying trends. It is just as likely to be affected by events within the US economy as our own. Subsequently consider looking at a time series of both the aud / usd and the twi.

Secondly, the following four factors are the main factors explaining trends in the last four years. Because I am not so kind as to do your essay for you, I will simply list them.

1 - Commodities boom
2 - Increased interest rate differentials
4 - Increase in AUD speculation (due to changes in risk appetites)
3 - Move towards the $USD as a safe haven during times of financial crisis

There you go. Hope that helps.