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Choose two theoretical models (e.g. Interest Rate Parity, Purchasing Power Parity, Balance of Payments, etc) that affect exchange rates, review the models for the determination
Choose two theoretical models (e.g. Interest Rate Parity, Purchasing Power Parity, Balance of Payments, etc) that affect exchange rates, review the models for the determination of the AUD/USD exchange rate. Later develop a multifactor model based on your chosen variables and estimate the model based on historical data. Use your model to generate the AUD/USD forecast for the next quarter. Explain your data (include time period/frequency employed), methods, and results for your exchange rate forecasts?
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