Exchange Rate Behavior

Students are expected to provide the economic explanation not just in the theoretical sense but in the applied sense to justify the behavior of exchange rate movements in the spot market over the period. The use of meaningful graphs is key to set the context to expand the economic arguments. You are required to explain the major trends and intermediate trends that you observe in the sport rate movement during the last 5 years. A significant part of this section requires students to research online from credible sources i.e. Federal Reserve System, Reserve Bank of Australia, reputed news articles to identify policy measures - regulatory, economic, and political - undertaken by the respective governments that explain the behavior of exchange rate movement. It is important to note that policies taken by other countries can also affect the AUD/USD exchange rate. Similarly, investors' confidence, sentiments, bilateral trade transactions can also affect the exchange rate. All this information can also be incorporated in explaining the behavior of the AUD/USD movement.