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n 2 0 1 7 , an article on bloomberg.com had the following headline: The Australian Dollar's Outlook Darkens. The article stated that: The march
n an article on bloomberg.com had the following headline: "The Australian Dollar's Outlook Darkens." The article stated that: "The march of the Fed toward higher US interest rates has also been a factor sapping optimism toward the Aussiedollar
Source: Michael G Wilson, "The Australian Dollar's Outlook Darkens," bloomberg.com, May
Briefly explain the article's reasoning.
A
When US interest rates rise, the value of the Australian dollar increases because the US trade deficit improves.
B
When US interest rates rise, the value of the Australian dollar decreases because Australian net exports decrease.
C
When US interest rates rise, the value of the Australian dollar decreases because investors demand fewer Australian dollars.
D
Higher US interest rates increase the value of the Australian dollar, causing Australian consumers to have more purchasing power.
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