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determine the historical movement of AUD/USD exchange rate and predict what the rate will be in 1 Jan 2021 . The specific requirements are as

determine the historical movementofAUD/USDexchange rate and predictwhat the rate will be in 1 Jan 2021. The specific requirements are as follows:

Tasks/Objectives

  • (1) Discuss the effect of Purchasing Power Parity and Interest Rate Parity on exchange rates.
  • (2) Discuss the factors which affect supply and demand of exchange rates.
  • (3) Develop your own theoretical model by combining any factors that you deem as important in determining the above exchange rate. You will need to estimate an econometric model to receive credit for this part.
  • (4) Discuss any qualitative and quantitative data that may affect the determination of the above exchange rate based on Task 3.
  • (5) Comments and Conclusions - summarise and discuss outcomes.

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