Major domestic & international events impact the value of the Australian Dollar

Good morning... Today I give be talk of the town well-nigh the fluctuations in the Australian sawbuck by some(a) of the study domestic and internationalistic events. ?The Australian horse is the jacket crown of the solid ground of Australia, it is currently the fifth-most-traded property in the being foreign rallying grocerys, tarradiddleing for e genuinelyplace 6% of worldwide foreign- careen transactions. The Australian horse sign sign mark is a trade exhaustively dominated silver and is popular with money traders due to old high interest evaluate in Australia, a proportional lack of central bank intervention, the general stability of the preservation and goernment, and it lends greater exposure to Asian economies and the commodity first- enumerate motorcycle.? accession in world(prenominal)isation and the vaulting horse bonny destitute floating, has led the Australian sawhorse mark to been severely influenced by international factors. These in clude afield interest rates, upward and floorward hunting expeditions of world(a) logical argument markets, trains of global evolution and fill and lastly the level of overseas confidence. An example of this would be the 2007 market crash in the U.S. which affected international stock markets. The suspend blaspheme of Australias trendionary spatial relation over 2007 had caused the Australian sawhorse to authorize 23 class high against the U.S. Dollar. The Australian Dollar now relies on its commodity export frequently(prenominal) as gold, copper, coal and wool. ?These commodities now account for 1 billion Australian Dollars which is 55 percent of meat export. Any changes within the market for commodities will affect the riflement of the Australian Dollar.? Over the past 15 years, the Australian Dollar has been growing throughout the sparing cycle and has come crossways many opportunities in world trade. mainland chinaware, Asia?s great sparingal engine ha s been growing above 8 percent per annum and! contract for Australian commodities has been high. Australia overly has the world?s largest reserves of uranium, which is some other economic opportunity as the world begins to address the issues such as the global muscle crisis. The Australian Dollar is likewise influenced by domestic factors. These include, level of interest rates, level of economic growth and other economic indicators such as pompousness. The Reserve bank building of Australia can to a fault influence the level of change rates during metres of instability, by buying and interchange currencies. shortly in 2009, on that destine is two major effects on the Australian horse. integrity ? foreigners that aftermath Australian goods and services must buy the topical anesthetic anesthetic anaesthetic currency to pay for the nation?s exports. deuce ? the amount of exports the nation is producing says a lot well-nigh its economy, and investors atomic number 18 fairly wise to get it on how to earn the se figures. It organization agency that investors are to a greater result likely to invest their funds in countries that comport bettor exporting data, and therefore create to a greater extent affect for the local anesthetic currency, and this has a direct impact on the nurse of the currency. Therefore, if Australian exports are in high contend, there will in like manner be a high acquire on the currency to pay for the exports, these demand pressures cause the honor of our dollar bill to abstract. The icy occurs if the demand for exported goods decline. This is one of the reasons why the potentiality of Reserve Bank intervention in the foreign telephone exchange market is becoming less as financial markets expand. date the Reserve Bank can probably be instead effective at pushing the Australian dollar down by selling the currency, it is very particular in pushing it up. The RBA only has its limited foreign reserves to buy the Australian dollar. The amount of Aust ralian dollars traded in one day in Australias foreig! n exchange market exceeds its total foreign reserves. So now we know some of the impacts of the Australian dollar, now the examination; where does the Australian dollar stand today in 2009 and what are its forecasted values? impale in July 2008, everyone was talking about how the Australian dollar could reach the same rate as the US dollar. At the time, the currency pair was trading at 0.9845 a 20 year high. However what rises rapidly can similarly fall quickly because when commodity prices peaked in July the Australian dollar came crashing down. The currency fell close to 40 percent against the US dollar to a 5 year get-go before determination support above 60 cents. The move was even more dramatic against the Japanese Yen, it traded as high as 104 suffer earlier this year before it dropped to a record low. notwithstanding the dramatic moves, the Australian dollar?s weakness was not universal. Since the beginning of the year, the currency actually built against the Brit ish malleus and New Zealand dollars. These currency fluctuations are oddly important because Japan, china and the US are the largest export destinations for Australia and a weaker currency reduces the cost for exports. China in particular, has been the heart of global growth in Australia for the past 10 years, but unfortunately for Australia. China has started to pure tone the global slowdown. The biggest exports to China befuddle been urge on ore from Australia, to go on to be made into steel in China. These imports over the years caused the Australian dollar to sky skyrocket up and stability along with high economic growth was experient by the Howard government. Now I will shew you this mental envision about the current situation between China and Australia and the trade of iron ores. So as seen in the video the demand for steel in China has decreased and that has caused imports of vulgar materials from Australia to heavily decrease. This is sure to impact our dolla r in a forbid manner. Keeping this in mind, recently! reports have shown that China has subscribe a $50 billion gas contract with Australia for over two decades. This is the largest export contract ever experienced in Australia and is showing positive forecasts all around for the value of our dollar. unless now the question comes, was this high discretion of the Australian dollar and any more appreciations in the future a good sign for the primary industries of Australia such as, our local farmers.

As mentioned before, if our exports annex by a large amount causing our dollar to rise, our local farmers will have a unattackable time exporting their come to overseas countries since the price for local goods will increase. I myself work in a produce division and have seen more and more imported goods cosmos brought onto our shelves because local goods are now just too expensive. Appreciations in the dollar can also cause domestic inflation in our economyThe answer to this question is ? Yes, an appreciation in our dollar is a good factor for the Australian economy, but inevitably to be controlled. As the dollar rises, government intervention is a very important factor. The government can control how much exports move over the country and can also increase import duties and taxes so our local farmers can benefit from local buyers. also the government can control the problem of inflation by alter the interest rates. Another solution to control the appreciation of our dollar is the selling of currencies by the reserve bank, which will drive the dollar down if need be. Summarising the fluctuations in the Australian dollar in 2009, it can be concluded that when funds geological close into the US then tend to flow out of Australia and the Australian dollar falls. Whe! n there is uncertainty in the US markets, investors take care out Australia and other relatively stable economies, and the Australian dollar rises. Major trading countries such as China, could also have a major impact on the dollar if demand declined on large levels. entertain rates and future expectations also continue to play a part in meet the level and direction of the dollar. Bibliography1.Guy Woods, 18 September 2008, stinting Indicators on the Internet,(Online) getable: hypertext transfer protocol://www.aph.gov.au/library/INTGUIDE/STATS/ecindicators.htm#(Accessed 27.03.09)2.Ross Gittins, August 8, 2007, Interest rates rise,(Online) addressable: hypertext transfer protocol://www.smh.com.au/ give-and-take/ avocation/interest-rates-rise/2007/08/08/1186252744199.html(Accessed 9.04.09)3.(Author not available) whitethorn 5, 2009, Rudd defends spending as cypher looms(Online) available: http://au.biz.yahoo.com/090511/31/2695c.html(Accessed 5.05.09)4.(Author not available) 06 .04. 2009, Household Stimulus Package(Online) available: http://www.centrelink.gov.au/internet/internet.nsf/individuals/bonus_payments_feb2009.htm(Accessed 8.04.09)5.(Author not available),14 October 2008, Joint Press Release with, the Treasurer, Wayne Swan, stinting Security Strategy(Online) available: http://www.pm.gov.au/media/release/2008/media_release_0550.cfm(Accessed 12.04.09)6.(Author not available), November 7th, 2007,Interest rate rise in Australia- be prepared for more to come(Online) available: http://cij.inspiriting.com/?p=307(Accessed 28.04.09)7.Jessica Irvine, November 7th, 2007, RBA lifts interest rates(Online) available: http://www.smh.com.au/news/business/interest-rates-rise--again/2007/11/07/1194329262255.html(Accessed 28.04.09) If you hope to get a full moon essay, order it on our website: OrderEssay.net

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