Company X is a multinational firm headquartered in Australia with substantial interests in China. The CEO of Company X has contacted you to say that she has just seen the following headline in a well-respected newspaper:

Chinese Yuan to continue to fall against the AUS dollar over the next year.

1. Advising on the likelihood that this prediction proves to be correct.

2. Providing your prediction for medium- and long-term AUD/CHY exchange rate.

3. Advising on the available transaction hedging strategies if this prediction proves to be correct.